Cherokee County Sues Bobo Brothers
The Resource Recovery Development Authority has filed suit against Wood-Tech, Inc., one of several businesses owned by Ball Ground Recycling manager Jimmy Bobo and his brother David Bobo.
Cherokee County has taken another step in its quest to regain money lost in a recycling facility deal that has forced taxpayers to pick up the tab.
The Resource Recovery Development Authority, made up of the five county commissioners, has filed suit against Jimmy Bobo, David Bobo and companies owned by both men, claiming fraud and conspiracy to commit fraud.
Along with the Bobos, the defendants in the suit are: Woodtech LLC, BG Land LLC, Bobo Grinding Equipment LLC, Upland Development Group Inc., Georgia National Trucking LLC, Prime Management LLC, J. Bobo LLC, D. Bobo LLC, and Sheffer and Grant Architects P.C.
The county alleges Ball Ground Recycling operated as the "alter ego" of the other companies and both men operated BGR interchangeably with its other companies "as one and the same entity under common control and ownership, and have abused BGR's corporate form by comingling the funds and affairs of BGR with the Bobo companies and their perosnal affairs and funds."
The county contends the Bobos breached their contract by failing to make payments on the $18 million bond the county backed to relocate Ball Ground Recycling from land in Holly Springs to property along Highway 5. It notes the default is costing the county $100,333 per month. The county also notes the default will cost taxpayers to the tune of $1.2 million until the bond matures in 2037.
The estimated amount left on the bond, including interest, is about $30 million.
Both counts two and three sue Woodtech for owing back rent at $100,333 per month during its use of the Ball Ground Recycling facility.
The suit accuse the Bobos of not using bond proceeds solely for the purpose of the project. The county paints the picture on why they believe the Bobos allegedly committed fraud with bond proceeds and concealed the act from the county by producing invoices and bills that represented costs for the projects. It also alleged the company committed fraud "for their personal use."
When reached earlier this week, Jimmy Bobo did not respond directly to the lawsuit.
"We regret that the downturn in the economy ultimately killed the business that we were operating with the county," he said. "We held out, to our detriment, much longer than most businesses in the construction industry. Regardless of the lawsuit, we remain focused on helping the county find a replacement tenant and new jobs for all of the people we had to lay off."
The commission in 2006 created the Resource Recovery Development Authority, composed of the five commissioners, and backed up to $18 million in bonds, which were used to relocate the former Cherokee Recycling to land along Highway 5 just south of Ball Ground.
The agreement stipulated Bobo was to make payments of the bond into an escrow account, but the county learned last year Bobo hadn't been making the payments. That forced the county to pick up the tab, which it will still be responsible for if it does not find a new operator for the site.
Ball Ground Recycling in late May filed for Chapter 11 bankruptcy, and the company was subsequently forced to remove itself from the property. The county, along with the RRDA, have been in bankruptcy court trying to remove the automatic stay imposed by the bankruptcy filing.
The Cherokee County grand jury in June decided to launch an investigation into the deal and earlier this month issued 13 recommendations for the county in the aftermath of the deal gone sour. The grand jury in late September also voted to continue looking into the deal
The county commission last month voted to proceed with placing a request for proposal for qualified companies to perform a forensic audit.
See the attached .PDF to read the complete lawsuit filed by the county.