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CBp Carbon Responds to Statement

It’s a case of dueling press releases as a European tire recycler, CBp Carbon Industries, trades charges with one of its founding members.

On August 9, 2009, John Fader issued a press release to announce that he had filed a writ (ref. 209/146172) in the Commercial Court in Hasselt, Belgium to enforce termination of his relationship with CBp Carbon Industries, Inc., a company he co-founded in 2005 with John T. Novak, a stock investor promoter from Vancouver, Canada; Athens, Greece; and Bratislava, Slovakia. In the release, Mr. Fader asserted that he had formally resigned from both the company and its board in March, 2009, but the company continued to promote him on its website as a Director and as Executive VP of Technology. Mr. Fader’s writ alleges, among other things, “breach of trust” and the “unlawful use of Petitioner’s name and reputation.” The dispute involves CBp’s decision to shut down a pilot plant based on Mr. Fader’s technology in Hungary and move the equipment to a new commercial plant in Cyprus. The press release quotes Mr. Fader as follows: “I resigned from my company because of what I considered to be gross mismanagement of the business by its President John Novak, and a disturbing lack of proper corporate governance and transparency; and, because after four years, selection by the EU, and shareholder investment of approximately USD $60 million, my proven technology has still not yet been successfully commercialized.”

The press release further asserts that Mr. Fader’s resignation from CBp Carbon Industries Inc. follows the resignation in January, 2009, of the company’s US General Counsel who had earlier resigned from the board, as well as the resignations of the company’s Director of Operations for Europe and the Middle East, and the company’s Chief Financial Officer.

On August 11, 2009, CBp Carbon Industries responded to Mr. Fader’s press release. Here is the full press release. The company states that it will respond to Mr. Fader’s lawsuit in court and explains its decision to shut down the Hungarian plant as follows:

In 2008 Mr. Tsantrizos [the company’s CTO] completed successful development of the Csongrad [Hungary] pilot plant and testing of resultant product. At the conclusion of pilot operations the Company had a decision to make as to whether to continue at Csongrad with development of a commercial plant or construct the first commercial plant in Cyprus. After extensive analysis and expert recommendation the Company board determined that expansion of Csongrad was not advisable and that the commercial plant should be in Cyprus. Under the leadership of Mr. Tsantrizos, and with no input from Mr. Fader (who was apparently not well enough to travel), the Cyprus commercial plant was built by the Company’s team and substantial new technological developments were effected in perfecting the commercial plant. The Cyprus plant was substantially completed in July, 2009 and is now undergoing ‘hot tests’ with tires being processed. In addition, close technical cooperation has been conducted with the Company’s major customer to design the Carbon Green (substitute carbon black) for best use by the Company’s customers.
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