Could business rift threaten ethanol plant?

Former partner says he has a legal stake
2010-04-12T00:05:00Z Could business rift threaten ethanol plant?By Christine Kraly -, (219) 662-5335

In the spring of 2007, Evansville businessman Earl H. Powers introduced Don Bogner to the Lake County Solid Waste Management District as the man with the technology to revolutionize the county's trash business.

But a later disagreement between the two men now could pose a legal headache for the county's multimillion-dollar ethanol project.

"I don't think it's ended, actually," Bogner said of their business partnership.

"We wrote him and said, 'You're no longer involved. You're not involved with us,'" Powers recently said. "It's over."

Joining forces

Bogner, president of Wooster, Ohio-based Genahol Inc., has been shopping his plans to build a waste-to-ethanol plant since at least 1993.

According to a 1994 Akron Beacon Journal report, Bogner's waste disposal firm had planned to build a $5 million plant in Canton, Ohio, to process 150 tons of trash a day.

"(We've got) to prove to people that it can be done and that it will do what we say it will do," he told the newspaper. "Getting this plant up and running is our big hurdle."

The new owners of a waste hauling company he was going to partner with ultimately didn't support the plan.

Bogner then set his sights on Lake County in 2007, when the district requested proposals to build a waste disposal facility here.

Powers had been working with one of Bogner's former colleagues on a proposal, when Bogner said he introduced Powers to what he declared was a better processing method.

The two began work on a joint proposal, with Bogner overseeing technology and Powers in charge of financing.

According to Powers, Bogner had signed a letter of intent to work with Powers' firm, World Net Capital 1, on the plan.

On June 20, 2007, Genahol-Powers 1 LLC submitted its proposal to Lake County. Over the next several months, the two men traveled to Merrillville, submitting and explaining plans to the waste management district.

Then, Bogner said, "Some place in there, as we went down the road, I think Mr. Powers felt he didn't need Genahol anymore."

A complicated split

The way Bogner describes it, he was trying to be helpful.

On April 28, 2008, Bogner registered the name Genahol-Powers 1 LLC with the Indiana secretary of state's office.

"We were in a pretty vulnerable position, submitting a bid under that name and not having it registered," Bogner said. "I took it upon myself to register the name."

But Powers insists Bogner's gesture was uninvited, saying, "I didn't authorize him to put my name on his company."

Powers said sometime before Bogner's letter of intent with him expired April 11, 2008, he learned part of the process Bogner recommended for the plant didn't work.

Bogner disagreed, and he recently suggested Powers was impatient in finalizing some of the process components.

On June 2, 2008, Powers registered a different version of the company's moniker, Genahol-Powers One of Indiana LLC. About two weeks later, Powers changed the name to Powers Energy One of Indiana LLC.

The title morphing frustrated Powers, whose confidence in his Bogner partnership had soured.

"He led me to believe he had a process. He didn't," Powers said. "He led me to believe that he had four different projects going. He didn't."

Bogner said he still is attempting to line up investment cash for his long-pursued Canton plant and has others in progress in Illinois and Arizona.

A spokesman for Canton Mayor William Healy said no plant has been built or permitted, adding, "The last we heard, (Bogner) was working on financing."

A spokeswoman from the Illinois Environmental Protection Agency said the agency had no information about any Genahol projects in that state. An Arizona Department of Environmental Quality spokesman said his agency has no record of a proposed Genahol site.

Legal challenge brewing?

"This has really hurt Genahol," Bogner said of his discord with Powers.

Bogner estimated his company shelled out at least $375,000 preparing the Lake County proposal. Genahol delivered the Genahol-Powers presentations to the waste management district board.

"Genahol's deeply involved, deeply committed, and (we have) a big stake in this," he said. "I'll get to the bottom of it. The project is a good project. I certainly want it to succeed."

But if the businessmen cannot settle their disagreement, Bogner said, "Earl's got some problems."

The company name flux is evident in proposal reviews the county relied upon in choosing Powers' group as the winning bidder for a 20-year trash disposal deal. A February 2008 engineering analysis of two proposed biorefineries that favored Powers called it Genahol-Powers 1. A financial review finished in July 2008 referred to the company as Genahol-Powers One.

Four months later, county officials signed the contract to build the plant with Powers Energy One of Indiana.

"For that contract to end up in anybody else's name, they need a release from Genahol-Powers 1 LLC," Bogner said. "That never happened."

Bogner's registration of Genahol-Powers 1 LLC appears to be up to date with the Indiana secretary of state's office, where he filed an entity report just last month.

Powers said he is not worried about any legal action, and he cast doubt on claims Bogner makes to the Schneider project.

"He's trying to get in," Powers said. "He's liable to tell you that he owns the world."

Jeff Langbehn, executive director of the waste management district, noted that all three of the district's original bidders have changed names since the 2007 start of the bidding process. One of the losing bidders also pitched a trash-to-ethanol plant, while the other offered a landfill solution.

Langbehn said if there is a dispute over what stake Bogner may still have, "That's between him and Earl. Our relationship is with Powers. We have no relationship with him."

Bogner said the waste management district's lawyer, Clifford Duggan, sent him a letter in March that "basically said, 'We don't want to get in the middle of you and Earl.'"

"Like it or not, you are," Bogner said. "You're the one who awarded the contract. I think they've got some problems."

Langbehn accused Bogner of bandwagoning on the plant's potential.

"Whenever a project of this magnitude starts creeping forward, it's not unusual for people to come out of the woodwork," Langbehn said. "You can't ever stop people from suing you."

Duggan said he is not concerned about a Bogner lawsuit, either to clarify his stake in the project, or to recoup Genahol's costs.

"I'm confident in both the procedure that was followed and the contract we have in place," Duggan said.

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