European Metal Recycling Ltd. subsidiary and its insurance
company are suing a broker in an effort to recover losses
incurred in importing scrap metal containers that arrived in
Dallas filled with debris.
Southern Recycling LLC
(SoRec) filed the lawsuit in U.S. District Court in South
Carolina against Gibbs International Inc., Spartanburg, S.C.,
which acted as broker to procure copper scrap from Regent
Phoenix Imports & Exports, which was storing the material
at a warehouse near the Port of Manila in the Philippines.
SoRec claims it paid for 500,000 pounds of No. 1 copper wire
but received containers filled with cement blocks and slag.
SoRec, which arranged
for the deal in November 2012, said that 11 of the 13
containers held no copper. It paid $1.7 million for the
containers and released the money once each pair of containers
reached the port.
An investigation by
CNA Insurance Co. Ltd., the marine cargo insurer, found that
the containers were tampered with to allow the doors to be
opened without breaking the seals. It is suspected that copper
was initially placed in the containers, which arrived in pairs,
and then swapped for debris after inspection, the lawsuit says.
The switch likely took place before the material left the
Philippines, it added.
A Gibbs spokesman said
the company wouldnt discuss litigation matters, but plans
to vigorously defend itself.