Judge OKs Sale of Trash Company to Rival Firm

A federal bankruptcy judge said Monday she will allow the sale of Ventura County’s second largest trash company to a Torrance-based rival, as long as officials from the county, Thousand Oaks, Moorpark and Simi Valley agree.

Judge Robin Riblet said she would let Western Waste Industries take over Simi Valley-based GI Industries, which has exclusive contracts to pick up trash in the three cities and the unincorporated portions of eastern Ventura County.

The deal--worked out between the Asadurian family, which operates GI, and Kosti Shirvanian, president of Western Waste Industries--is part of a plan to reorganize GI and bring it out of federal bankruptcy protection.

At the heart of the deal--estimated to be worth more than $4.5 million--is a stock swap that would give the family one share of Western Waste Industries stock for every 10 shares of GI stock. The Asadurian family controls about 1.5 million shares of GI stock.

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Officials from Thousand Oaks, Moorpark and the county have opposed the sale and transfer of the exclusive contracts, but company officials said they believe they can persuade the cities and the county to sign off on the deal.

Without those contracts, GI Industries--which had estimated revenues of $20 million last year--would be worthless, said Ron Durkin, the trustee appointed by the U.S. Bankruptcy Court to watch over GI’s assets. The company filed for bankruptcy protection in 1993.

“If the sale went through and they pulled out we’d be left with a company with no value,” Durkin said. “We wanted approval of the sale to be conditional on city and county approval.”

Durkin said although the sale could help lift GI Industries out of bankruptcy, he would not support the deal until Western Waste Industries won approval from the cities and the county.

Simi Valley officials have not objected to the sale, saying that as long as the terms of the contract are fulfilled, Western Waste would be welcomed to do business in their city.

At the hearing, Thousand Oaks Assistant City Atty. Nancy Kierstyn Schreiner said her City Council wants to take a closer look at Western Waste Industries before agreeing to transfer its contract.

Ventura County Assistant County Counsel Don Hurley said the Board of Supervisors wants to conduct a similar review.

Taking that into account, Riblet gave officials from GI and Western Waste until the end of July to work out the deal.

Attorneys for GI Industries said they had already discussed the deal with the local officials and were told it would take between 60 and 90 days to review the sale and get approval for the transfer of the contracts.

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To further complicate matters, Western Waste Industries is in the process of being acquired by Texas-based USA Waste Services Inc., a development that concerns some officials who say they don’t know anything about the company.

That deal, which is estimated to be worth more than $500 million, would create the third largest trash firm in the nation, with as much as $800 million in annual revenue and 1 million customers in 23 states, according to industry sources. The Securities and Exchange Commission will decide May 1 whether to allow the sale.

Furthermore, local government officials have expressed concern about recent news reports that Western Waste Industries allegedly gave a former Compton city councilwoman monthly cash payoffs.

Top officials from Western Waste Industries testified at Monday’s hearing that they were committed to maintaining the current level of service and keeping the existing management of GI, including current Chief Executive Officer Michael Smith.

“[GI] will be a wholly owned subsidiary of Western, which will be a wholly owned subsidiary of USA,” said Les Bittenson, Western Waste Industries’ Chief Operating Officer.

Western Waste Industries would also keep members of the Asadurian family on the payroll as consultants, company officials said.