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A. Schulman seeks $31 million tied to Lucent, Citadel purchase

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A. Schulman Inc. is seeking $31 million from the sellers of Citadel Plastic Holdings related to losses it has incurred from Citadel’s Lucent Polymers properties.
Schulman said its investigation shows Lucent falsified test results on documents provided to customers and other parties pertaining to the physical properties of Lucent products. A. Schulman purchased Citadel last year for $800 million.
The Fairlawn polymer company this week said since Jan. 1 it has incurred related costs of $7 million tied to Lucent.
“We have reviewed our legal position in connection with the purchase agreement of Citadel and we believe that the sellers are responsible to compensate A. Schulman for the Lucent losses that we have and may incur,” Bernie Rzepka, president and chief executive officer, said in a statement.
“ ... We intend to take full advantage of our contractual rights to pursue remedy,” Rzepka said. “The company has provided a written claim notice to this effect to the sellers and to the escrow agent with respect to the $31 million indemnity escrow established. Further, we believe that appropriate compensation of this matter exceeds the escrow amount. The company has engaged Skadden Arps as special litigation counsel for this matter.”
 


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