HICKORY, N.C. - A Hickory-based company with ties to a NASCAR race team is tangled up in several legal battles. A court-appointed bankruptcy trustee found that the company spent "significant" amounts of money on things that appeared to have nothing to do with running the business.
Electronic waste recycling company "Zloop" was founded in 2012 with the goal of recycling electronic equipment.
The company is led by CEO Bob Boston. Zloop has shelled out hundreds of thousands of dollars to support the racing career of his son, Justin Boston.
An Eyewitness News investigation found that the company is mired in legal battles and complaints from people with whom it used to do business. Last year, it filed for Chapter 11 bankruptcy reorganization
"Once they get into bankruptcy, there's bankruptcy laws that protect them," said Paul Dickinson, an attorney not involved in the case. Dickinson often represents investors trying to get their money back.
He said a bankruptcy filing can change everything.
"There's very little opportunity for investors to recover anything," Dickinson said.
Zloop's court-appointed bankruptcy trustee argued in a motion before the court earlier this year. "More money was spent on furthering the professional racing career of Mr. Boston's son than in any other part of operating this business during 2014 and 2015."
The trustee said Zloop continued spending on things that did not appear to be related to the business, even after filing for bankruptcy, including $338 for ammunition.
In court testimony, when asked about the expense's purpose as a business use, Bob Boston testified, "I guess if someone came in to break in, I would shoot them."
Zloop disputed the trustee's allegations and said the race car sponsorship was part of a national advertising campaign to assist it in selling franchises. The bankruptcy court did not grant the trustee's motion.
Eyewitness News attempted to reach Bob Boston through Zloop and also contacted him on his cellphone. Bob Boston answered, but when the reporter introduced himself, Boston hung up.
Hickory attorney Gary Young, who is representing Bob Boston in a civil matter, told Eyewitness News that the NASCAR sponsorship was legitimate because it was designed to show potential investors Zloop investors were serious about the company.
Young filed a lawsuit on behalf of Bob Boston July 12. It makes the claim that another company provided Zloop with inadequate equipment, which led to some of Zloop's financial troubles. It also alleges that the company that sold the equipment worked with an investor to attack Zloop.
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