LKQ: A Study in the Ties That Bind

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Here's one that has fallen through the cracks but reminds me of recent IPO Integrated Alarm Systems (IASG - commentary - Cramer's Take). It's auto parts recycler LKQ (LKQX - commentary - Cramer's Take), which went public Friday at $13 and is now more than $2 above its offering price.

So what if insiders are selling on the deal?

So what if the company is a quasi-rollup?

And so what if many of the top officers were execs at Waste Management (WMI - commentary - Cramer's Take) back in the very bad old days?

Take Chairman Donald Flynn, for instance. He was CFO at Waste Management but left in the early 1990s, before the really bad stuff hit the fan. From there he moved on to head up Discovery Zone, which ended up filing for bankruptcy less than a year after he quit that job -- and just a month after he left its board completely.

Flynn also is a director and major shareholder of Emerald Casino, which filed for Chapter 11 after the Illinois Gaming Board revoked Emerald's license. According to the LKQ prospectus, the board's action came amid allegations that Flynn and his son Kevin made certain misrepresentations "in connection with investigations conducted by the board that two proposed minority investors in Emerald had ties to organized crime."

Another large financial backer who sold LKQ stock in the IPO is none other than former Waste Management CEO Dean Buntrock. Of course, he was sued last year by the SEC for being "the driving force behind the fraud" at Waste Management. The case is still pending. No wonder he's a "former" director!

And the list goes on: CFO Mark Spears was once controller and principal accounting officer of Waste Management. (Sweet!) Controller Frank Erlain is the former controller of Discovery Zone.

But wait, there's more: General Counsel Victor Casini was general counsel and secretary of Discovery Zone. Now he spends half his time working for Flynn Enterprises, a venture capital firm.

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Herb Greenberg writes regularly for Street Insight. In keeping with TheStreet.com's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send any to Herb Greenberg.

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Brian Harris and Mark Martinez assisted with the reporting of this column.