Global Environmental Energy Corp

[scion]

Irish-American firm battles 'consultant without contract'
Sunday, October 07, 2001


An Irish-American company, which is quoted on the Nasdaq and predicts annual incomes of £2 billion in the future, has become involved in a bitter row with an Irish former-associate of the firm called Seamus Lagan.

Chris McCormack, the president and chief executive of Life Energy, has predicted that a number of civil legal actions will be taken in the US, arising from the company's falling out with Lagan.

The former taoiseach, Albert Reynolds, is non-executive chairman of the company, although it should be stressed that he has no involvement in the day-to-day running of the company.

He referred all queries from The Sunday Business Post regarding the affair to McCormack.

The dispute dates back to the departure of Lagan from the company earlier this year. Lagan says that he was running the Irish operations of Life Energy, although McCormack insists that he had no official role in the company. He described Lagan as a "consultant without contract".

However, McCormack conceded that Lagan had an agreement with Life Energy for remuneration and 300,000 shares in the company, but insists he was not an employee.

In an interview last week he appeared to contradict himself by saying that the board "cancelled the contract in March".

Lagan had been with the company since the previous April/May.

Lagan left the company (in circumstances that are disputed) in February of this year. Lagan is an undischarged bankrupt in Northern Ireland. He says he now buys and sells shares online and is also involved in promoting a company called BTSL Technologies.

This company was registered in the past three weeks and is believed to be developing waste incineration technology.

Lagan also operates a company called Agamede from an apartment near the IFSC. Agamede's website offers courses in how to trade shares online.

Life Energy describes itself as a "sustainable developments company".

A recent document filed with the US Securities and Exchange Commission reveals that the company anticipates massive investment over the coming years.

Although it says it has research interests in other areas -- including oil and gas and mobile telephony -- Life Energy's principal interest is in development of what it calls the "Biosphere Process", a means of producing electricity by burning municipal waste.

According to its SEC filing, the company has signed an agreement with a manufacturing subcontractor for the first 50 Biosphere systems.

The company has paid a deposit of $50 million by issuing shares to the manufacturer. Another $200 million -- the remaining 80 per cent -- will have to be paid.

The company's SEC filing states that the systems are "nearing completion" and will be distributed in Africa and the Middle East. These will generate an income of more than £4 million a month, which it says will commence in the coming months.

However, this is only the tip of the iceberg of the company's ambitions.

According to the SEC filing, Life Energy is "concluding contract discussions" for an additional 2,000 machines, although elsewhere in the document it says it has "orders" for the machines. This will entail the spending of $10 billion, although the filing states that no credit facilities have yet been arranged.

The company envisages that each machine -- which will be leased over a 15-year period -- will generate $83,000 per month. 2050 machines would thus generate an annual income of over $2 billion.

At one point it was thought that Life Energy would engage in a joint venture with a US company called Nathaniel Energy Corporation which initially developed a prototype burner.

However, relations have broken down between Nathaniel and Life Energy, to the extent that Nathaniel's chief executive officer, Stan Abrahams, asked the US ambassador to Dublin, Michael Sullivan, to intervene to secure the release of a prototype burner earlier this year.

A spokesman for Nathaniel last week confirmed that the dispute is ongoing.

However, McCormack told The Sunday Business Post that he "owned the Nathaniel technology", through an entity called McCormack Consultants.

McCormack Consultants are also employed by Life Energy.

Last year, Life Energy set up a company in the Sciences Services Centre in Dundalk (an initiative of the Dundalk Chamber of Commerce) which it called the Reynolds-Romanov Research Institute.

Dr Valeri Romanov, a Russian scientist and former head of the control systems of the USSR's nuclear submarine and missile programme, was engaged by the company as head of its research division.

The company left Dundalk at the end of March this year, having occupied premises there since September.

The Dundalk Enterprise Development Company, which is landlord of the Sciences Services Centre, says that it is owed £90,000 in rent.

A spokesman for the company said that it was taking legal action against Life Energy to recover the money. Proceedings are to be issued shortly, he said.

McCormack insists that Life Energy (the US company) has "no relationship with the Dundalk Enterprise Development Company", although the SEC filing indicates that the US company acquired the Irish registered Life Energy company last November.

However, last week McCormack said his company had "no intention of paying a full year's rent".

Life Energy never signed a lease, he said, but he had instructed the company's solicitors to reach a settlement.

He also said that he "still had amicable relations with them." He stressed that Life Energy left Ireland because it was offered considerable inducements by state and local authorities in New York.

He said that Life Energy had been given a $30 million grant. No funding had been available for the company in Ireland.

Life Energy has moved its operations to Utica, New York, to the former premises of a company called Health-Pak, although it still maintains an office in Dublin.

Life Energy reversed into Health-Pak last year to gain a Nasdaq listing. Last year, its shares reached a high of $4.80 (November 24) but are currently trading at 51 cents.

According to the SEC filing, 75 per cent of the class 1 shares in the company are owned by the Liberatore family (who previously owned Health-Pak), McCormack, Reynolds and three Isle of Man-registered companies, Eden Developments, McIntosh Enterprises and Chalise Investments.

McCormack declined to say who owned the Isle of Man companies, but said that they were "fully checked out by our attorneys".

Documents obtained from the companies registration authorities on the Isle of Man show that the three companies -- which Chris McCormack said have been checked out by his attorneys -- are owned in turn by nominee companies. The shares in all three companies with holdings in Life Energy are owned by Mt Holdings and Mt Nominees, both companies registered in the Isle of Man.

The directors of the nominee companies are Isle of Man-based accountants and tax advisers, making it impossible to establish who are the beneficial owners of the three companies.

http://archives.tcm.ie/businesspost/2001/10/07/story307028.asp