Sludge Watch ==> Pat Nicholson Versus N-Viro - N-Viro wins this round

[Maureen Reilly]

http://toledoblade.com/apps/pbcs.dll/article?AID=/20070717/BUSINESS03/707170352/-1/BUSINESS


Article published Tuesday, July 17, 2007
Arbitrator backs N-Viro on end to pact with founder
Consulting post paid Nicholson $92,000 yearly
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Nicholson

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By GARY T. PAKULSKI
BLADE BUSINESS WRITER

Longtime Toledo business executive J. Patrick Nicholson has lost a round in 
an ongoing battle with the current managers and directors of a 
wastewater-treatment technology firm he founded.

An arbitrator has ruled that N-Viro International Corp., Toledo, was 
justified in July, 2005, when it terminated a $92,000-a-year consulting 
agreement with him under a provision dealing with "menacing," according to a 
recent regulatory filing by N-Viro.

The arbitrator ruled on the contract dispute June 25 after hearings held 
between January and April, 2007, N-Viro's filing said.

"The …filing …is accurate insofar as it goes," said Lawyer Thomas Palmer, 
who represented Mr. Nicholson in the arbitration. "The overall dispute was 
complex," he added.

The lawyer declined to discuss what Mr. Nicholson allegedly did to violate 
the contract, but said allegations stemmed from an event in 2003 that 
executives waited two years to act upon.

Timothy Kasmoch, current chief executive officer, said the matter centered 
on outbursts by Mr. Nicholson at N-Viro's West Central Avenue offices 
directed at company employees.

Mr. Kasmoch said he considers the arbitrator's decision a victory.

Asked if it might now lead to an end to litigation, Mr. Kasmoch said: "At 
this time, I have no interest in a settlement."

Mr. Nicholson filed suit last year against certain directors, former 
officers, and a key shareholder in U.S. District Court in Toledo.

He accused them of engaging in a conspiracy, preferential stock sales, and 
attempts to sell off assets to the detriment of shareholders.

In a response filed May 31, N-Viro officials contend that Mr. Nicholson was 
angry over his 2003 ouster as chairman. Directors took the action after a 
shareholder filed suit in Delaware, accusing the chairman of "using the 
company as a personal piggybank."

Mr. Nicholson denied the allegation. But, as part of a settlement of the 
Delaware suit, in which N-Viro was a co-defendant, the company agreed to pay 
the legal fees of the shareholder, according to a lawyer for Mr. Nicholson.

Replying to Mr. Nicholson's suit against the company, executives said that 
since being forced out as chairman, Mr. Nicholson "has made outlandish and 
baseless allegations in a steady stream of letters" to organizations 
including the U.S. Securities & Exchange Commission, the FBI, the Central 
Intelligence Agency, and the Ohio Attorney General.

The company said no FBI investigation is under way.

Mr. Nicholson founded N-Viro in 1970, and took it public in 1993. It has 
lost millions of dollars since then. Losses continued after his departure.

The firm announced last month that it has reached a deal with an Israeli 
company to operate an N-Viro-designed plant to treat sewage sludge at that 
nation's main treatment plant in Tel Aviv.

Contact Gary Pakulski at:
gpakulski at theblade.com
or 419-724-6082.