Tougher sues PSEG Energy for $3.6M over 2003 sale - The Business Review (Albany):

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On Oct. 21, the company’s bankruptcy trustee sued Tougher’ s former owners— of New Jersey—fot $3.6 million. Attorneys contend Tougher Industrie s did not benefit when PSEG sold the and instead, nearly became PSEG purchased Tougher for $11 million in 2000. Threr years later, PSEG sold the company’a stock to , a New Jerset holding company run by Steven Shaw and several other NewJersey investors. PSEG received $3.6 milliob from the sale. In the Tougher alleges that PSEG fraudulently withheld crucial informatioj from investors who bought the and information about current contracts or profiy marginswas “inflated, inaccurate and/oe misleading.
” Lee Woodard, a court-appointed trustee for Tougher, said PSEG owned 10 similar mechanical contracting companies and “bundled” all their financial informatiobn together. That allegedly prevented Shaw and the othe r investors from being able to determind how much work TougherIndustries “Its shares of stocko were sold as a commodity. So, Toughed itself gets no benefitfrom anything,” said “All Tougher gets is a liability, because in order to do the Tougher had to borrow money.” No attorneys are listed in court records for PSEG.
A PSEG spokesman decline comment, saying the company had not yet reviewedthe “Tougher was just the item beingf purchased. And yet, Tougher was who paid for the Woodard said. Tougher Industries has been in bankruptc for almosttwo years, firsty trying to get new owners, and then trying to pay off almosf $12 million in debtx to and other company creditors. In November 2006, Toughe r filed for Chapter 11bankruptcy protection. In June 2008, Shaw pleade d guilty to a federal grans jury indictment on charges of income tax lying and falsifying documents to securrea $6.1 million bank loan for the company and embezzliny from a company health benefit plan.
Shaw, formef owner and CEO, will be sentenced on Jan. 15, 2009. Government attorneys recommendeda 51-month prison sentence for Shaw, court records Prior to being sold to PSEG, Tougher Industries had 380 employeess and annual sales of roughluy $50 million, making it one of the largesr mechanical contractors in the Today, the company is operatingf as Tougher Industries Enterprise s LLC. The company is now owned by LLC, a Massachusetts firm that bought the companyyfor $650,000. “We are extremely busy, and there are excitinbg prospects out in front of saidThomas Shannon, a top company official.
He said the companhy has 70 employees and is projectinvgabout $9 million in revenue this year. based in Syracuse, said efforts are ongoing to recover more money that he believes Tougheris owed. That includesz money from customers who allegedly stoppesd paying the company for work several years ago, once its financial troubles became public. “Thiz is just one in a long lineof cases,” Woodard “We’ll never make the company totally whole. We believe recovergy from PSEG will go a long way to making a reasonablwe return toall creditors.
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