Creditors of Keywell LLC are suing the executives of the recently sold scrap-metal recycler, saying that they engaged in self-dealing that sapped the company of resources while "lining their own pockets," eventually driving the company into bankruptcy, the Wall Street Journal reported today. In a Tuesday bankruptcy court filing, Keywell's unsecured creditors' committee said that among other things, Chief Executive J. Mark Lozier, Chairman Joel D. Tauber and other executives arranged disguised equity infusions through a newly created entity from which they received "illegal" dividends. Keywell filed for chapter 11 in September, blaming the fluctuating price of nickel and slow sales. A judge last week approved private-equity firm Prophet Equity's $15.8 million purchase of the company.
