A Cooperstown company that has spent two years looking statewide for sites suitable for an ethanol bio-fuel plant is suing its former consultants who allegedly steered it away from Albany, where their rival firm was recently selected to pursue a similar project along the Hudson River.
Empire State Ethanol and Energy on Friday filed a lawsuit in U.S. District Court seeking over $72 million from the Lakewood, Colo. based-BBI International bio-fuel consulting firm plus three of its executives. They include vice president Jeff Kistner, senior manager Ed Stahl, and senior vice president and project manager Mark Yancey.
Stahl and Kistner are the managing members of the Huntersville, N.C.-based Albany Renewable Energy, which in April won a lease for 18 acres at the Port of Albany for a proposed $240 million corn-based ethanol plant. Albany Renewable is also listed in the suit as a defendent, along with Bio-Fuel Resources.
Empire State Ethanol’s suit comes less than two months after the Albany Port District Commission awarded that lease, which promises to yield the largest development in the port’s history. The Cooperstown firm alleges Albany Renewable secured that lease through deceptive and fraudulent practices.
In September 2006, Empire State Ethanol contracted BBI to identify ethanol plant sites in New York and develop feasibility studies for them. BBI last year recommended several prospective plant sites, such as Oneonta. Empire State Ethanol also eyed Cobleskill for a plant.
BBI is a leading worldwide consulting firm that has conducted development studies for over 200 U.S. ethanol plants. By last June, Kistner had taken control of the Empire State Ethanol project’s business planning and financial aspects, according to court documents.
Empire State Ethanol last fall independently identified the Port of Albany as another potential site. But when the Cooperstown firm mentioned its interest in Albany to BBI, Yancey in November said a confidential technology project would prevent the consultants from undertaking the port proposal, according to court documents.
Unknown to Empire State Ethanol then, the BBI executives were hatching plans for Albany Resources, “which was created for the purpose of constructing a competing bio-fuels facility in the state of New York, specifically at the Port of Albany,” the suit states.
Empire State Ethanol managing member Christopher Von Zwehl did not realize his consultants were also his competitors until February. Kistner then in an e-mail allegedly told von Zwehl he had been a principal in Albany Resources since August.
Tom Owens, the port commission’s general counsel, said he could not comment on the suit because he had not reviewed it. But he said “It appears to be a dispute between private parties.” Empire State Ethanol is seeking $57 million in compensatory damages in the form of lost earnings and lost profits plus $15 million in punitive damages.