The suit was filed on Nov. 13. A total of 12 defendants are named, including Jimmy Bobo, David Bobo, their associated companies, and Sheffer and Grant Architects. Defendants have 30 days to file an answer when they are served with a complaint, County Attorney Angie Davis said.
Jimmy Bobo LLC and David Bobo LLC are each identified as 50 percent owners of Ball Ground Recycling in the suit. In 2006, the county created the RRDA, composed of the five county commissioners. The authority issued $18.1 million in bonds used to relocate Jimmy Bobo’s recycling company from its former location on Blalock Road near Holly Springs to a site on Highway 5 just south of Ball Ground.
Bobo was under a lease agreement with the authority to pay $100,000 a month in bond payments up to $18.1 million borrowed by the authority to purchase land and equipment for the operation, which the authority owns under the agreement.
Commissioners learned last year from the Bank of New York that Bobo had not been making regular payments into an escrow account.
Bobo was forced to vacate the property in July. The lawsuit contends that he stopped making monthly lease payments around January 2011.
The suit contends that “the Bobo Companies, as well as their owners/shareholders Jimmy Bobo and David Bobo, were paid out of the proceeds of the Bonds for work undertaken or services performed that were outside the scope of the Project, or otherwise in violation of the Bond Transaction documents.”
It alleges that subcontractors, including companies owned by Jimmy and David Bobo, received payments in excess of what would be considered reasonable and customary.
The suit accuses Jimmy and David Bobo of improperly commingling Ball Ground Recycling’s funds with their personal and other business funds.
A dozen counts are listed in the suit against various defendants.
The first count accuses the Bobo Companies, Jimmy Bobo and David Bobo of breach of contract. It alleges that the Bobos breached contract by failing to make monthly payments after January 2011, by paying a general contractor amounts exceeding “reasonable and customary” charges, and in other ways.
The suit alleges that the county will incur damages in excess of $1.2 million per year until 2037 as a result of the breaches of the lease.
According to the second count of the suit, Wood-Tech, the Bobo-owned company that operated the recycling site, is liable to the RRDA in quantum meruit for the reasonable value of rent during its occupancy of the recycling site. The approximate amount of these rent payments, as presented in the suit, is $101,333 per month. The suit contends that Wood-Tech has an implied obligation to pay rent to the RRDA for the use of the property, facilities and equipment owned by the RRDA.
The suit’s third count, also against Wood-Tech, alleges that Wood-Tech breached an agreement with Ball Ground Recycling. The RRDA was the intended third-party beneficiary of the agreement, as Wood-Tech agreed to pay the monthly rent due.
The Bobo Companies, Jimmy Bobo and David Bobo are accused of fraud and conspiracy to commit fraud in count four. In the suit, the county contends that Ball Ground Recycling, through Jimmy Bobo, informed the county that work was being completed in accordance with contract documents, disbursed money was only being used to pay for project costs, all amounts paid to a general contractor were for “work actually undertaken or services actually performed,” and that amounts paid to the related-party general contractor did not exceed reasonable charges, among other things.
The suit alleges that Ball Ground Recycling “knew that said representations were false each time they were made and those representations were made with the intention of inducing plaintiffs to cause the trustee to disburse the proceeds of the bonds to Ball Ground Recycling to the detriment of the plaintiffs.”
The fifth count alleges that the Bobo Companies, Jimmy Bobo and David Bobo supplied false information to the RRDA, causing economic injury.
The suit alleges in a sixth count that Ball Ground Recycling unlawfully and improperly obtained bond proceeds that were used to pay Jimmy and David Bobo a profit for the costs of the project or for personal and/or business costs outside the scope of the project. For this alleged action, the suit charges the Bobos with conversion, since the proceeds rightfully belonged to the RRDA.
In a seventh count, the suit further alleges that the Bobos have received a portion of the bond proceeds for the improper purposes of being paid a profit related to the costs of the project or for costs outside the scope of the project.
Count eight alleges that the Bobos “have been conferred a benefit and have been unjustly enriched at the Plaintiff’s expense.”
Count nine of the lawsuit alleges ordinary negligence and negligent misrepresentation against Sheffer and Grant, the consulting architect for Ball Ground Recycling.
The suit contends that Sheffer and Grant did not exercise reasonable care in on-site observations and review of data supporting ball Ground Recycling’s applications for disbursements, leading to Sheffer and Grant negligently supplying false information to the RRDA.
Count 10 seeks punitive damages against the Bobo Companies, Jimmy Bobo and David Bobo.
In seeking punitive damages, the suit says the Bobos’ actions “evidence such willful misconduct, wantonness, malice, oppression, and an entire want of care which would raise a presumption of conscious indifference to the consequences thereof. Such conduct was committed with reckless indifference to Plaintiffs’ rights so as to make appropriate the imposition of punitive damages.”
Counts 11 and 12 deal with attorneys’ fees.
County commissioners, who also make up the RRDA, said the county is pursuing the lawsuit in an attempt to recover money lost when Ball Ground Recycling stopped making rent payments.
“This is part of the legal strategy we believe gives us the best chance to get the county paid the money it’s due. That’s really the bottom line,” County Commissioner Harry Johnston said. “We think this suit against the other companies and the Bobos personally, besides the one bankrupt company, provide the best opportunity to get the county paid.”
Commissioner Jim Hubbard added that the county is also trying to recover lost funds through a forensic audit and bankruptcy court.
“That’s all in an effort to determine if there was anything improper that was done, and hopefully to recover some of the losses,” he said.