Replies to post #81 on Nexus Energy Services Inc (IBGR)

[bonehead41]

Your right Trey is a puppet, Just some guy off the street that had a sign WILL WORK FOR FOOD, He signed up and now his name will be tarnished forever.

[MONEYMADE]

He and Cornell are buddies i see: "Daniel Fisher 07.12.07, 4:38 PM ET




Perhaps Earth Biofuels Chairman Dennis McLaughlin should have spent more time working on his business plan instead of schmoozing celebrities. Earth Biofuels, the Dallas green-energy firm he founded with the help of A-listers like Willie Nelson, Morgan Freeman and Julia Roberts, has been hit with an involuntary bankruptcy petition in Delaware.

Creditors are seeking Chapter 7 liquidation over $33 million in unpaid debt. Earth lost $68 million on sales of $42 million last year.

There's plenty of embarrassment to go around here. In addition to Earth's red-faced celebrity directors, there are supposedly savvy fund managers, including Sandell Asset Management and Cornell Capital, who poured $50 million into Earth a year ago.

Those funds apparently were willing to overlook--or never investigated in the first place--McLaughlin's résumé. It includes the $100 million bankruptcy of his previous energy company, Aurora Natural Gas, in 2001, and a short stint as chief executive of Ocean Resources, a shipwreck-salvage firm that traded in the pink sheets. McLaughlin left Ocean amid allegations of funneling cash to a management-services firm he then controlled. He denies the claims.

"Frankly, most people were just checking boxes and not doing due diligence on any of these investments," says analyst Peter Fusaro, president of the Energy Hedge Fund Center. "It was like lemmings."

Earth says it believes the Chapter 7 petition was unnecessary and the company is "confident in its business plan." Nelson quit as an advisory director in April, forfeiting 6 million shares of stock. That was several months after Forbes exposed McLaughlin's bankruptcy and business problems--none of which had been disclosed to investors.

McLaughlin formed Earth in late 2005 out of other penny-stock companies he controls including Dallas-based Apollo Resources International. Earth's market capitalization at one point soared to $344 million on investor enthusiasm for green-energy stocks. Julia Roberts once plugged the company on Oprah.

Raising money seems to have been McLaughlin's chief talent, however, even in that he fell short. The company sank more than $22 million into a shuttered New Orleans-area ethanol refinery last year but failed to come up with the $80 million needed to complete the project. Earth recently settled with its partners in the project, accepting the return of most of its investment, apparently interest-free, over the next couple of years.

He also has been investigated by the Securities and Exchange Commission over the relationship between his public companies and partnerships that are paid to provide management services to them. McLaughlin denies any connection to the partnerships, although he founded them. The status of the SEC investigation is unknown; neither Apollo nor the SEC will discuss it.

Earth isn't the only green-energy company bringing woe to its investors. Cornell Capital pumped more than $100 million into similar companies in recent years, mostly in the form of bonds that are supposed to be repaid by converting debt into stock.

That could be a lot of stock. Another Cornell client that raised $25 million last year, New York-based Greenshift, recently said in a filing it will issue 10% of its stock to Cornell to repay just $390,000. Greenshift shares trade at about 4 cents, down from 19 cents one year ago, and more than $10 a share three years ago.