Legal dispute threatens Puerto Rico concrete recycling venture
A joint venture faces allegations of contract breaches, financial misconduct and falsified agreements.
A joint venture between Concrete Recycling Centers of Puerto Rico (CRCPR) and local entities has escalated into a legal dispute, with allegations of breaches of contract, financial misconduct and potential criminal actions.
The case, filed in the U.S. District Court for the District of Puerto Rico, could significantly affect Puerto Rico’s recycling sector.
The plaintiffs, including CRCPR, Ronald Leventhal and Corey J. Hogan, are seeking the return of $600,000 in payments made to the defendants, no less than $5 million in compensatory damages and an additional $5 million in punitive damages for alleged malicious and reckless actions. They are also requesting further indemnification under Article 1538 of Puerto Rico’s Civil Code, which addresses intentional misconduct.
The joint venture, launched on Jan. 15, 2024, was intended to process concrete and metal scrap at sites in Toa Baja, Dorado and Ponce. Under the agreement, defendants were expected to secure a minimum of 20 truckloads of concrete and metal weekly at each location, increasing to 25 truckloads after February 18, 2024.
In return, defendants would receive $1.20 per ton for concrete rubble and $1 per ton for processed concrete sold from the sites. Plaintiffs claim they have not received payments and allege defendants failed to disclose financial transactions or report any income generated from the recycling operations.
Allegations of criminal conduct
The case also involves a disputed lease agreement for a 6-acre parcel in Toa Baja, allegedly falsified with property owners Justo Cruz-Morales and Ada Ivette Salgado-Calderón. The plaintiffs say this led to a criminal complaint (Complaint No. 2024:7-171:001603) against Clarisa Lugo-Vélez and Wallace Coban. If proven, the lease could be nullified, jeopardizing the venture’s legitimacy.
The complaint further raises concerns about Richard Sargent, who holds a 50% ownership in CCW Metal Recycling LLC, one of the defendant companies. Plaintiffs allege Sargent has been kept uninformed and uninvolved in business activities carried out under his company’s name.
The lawsuit highlights broader concerns about governance, transparency and good faith in business agreements. Plaintiffs argue the defendants’ actions constitute a serious breach of contract and are demanding the cancellation of the joint venture agreement along with the return of all funds paid.
This case comes as Puerto Rico works to bolster its recycling infrastructure. A ruling in favor of the plaintiffs could lead to stricter oversight of joint ventures and partnerships in key industries.
The case is being heard by U.S. District Court Senior Judge Francisco A. Besosa.
