Fertech Environmental Goes under after a Loan Default Riley and

Partners Fail to Raise More Money

By Adam Goodman Of the Post-Dispatch St Louis Post-Dispatch (MO), April 3,
1995

Fertech Environmental Goes under

after a Loan Default Riley and
Partners Fail to Raise More Money
Adam Goodman Of the Post-Dispatch, St Louis Post-Dispatch (MO)

Fertech Environmental Services Inc. - the most recent venture of Missouri

businessman and convicted felon Floyd E. Riley - has gone out of business.
The company had defaulted on a $2 million bank loan in February. Now it has ceased
operations after Riley and his primary partners failed to raise more money, its lawyer
said.
"They haven't been able to fund the shortfall in the debt," said St. Louis lawyer
Bernard W. Gerdelman, who represents Fertech.
Fertech owes millions to NationsBank of Texas, various suppliers and its employees.
But it has not filed for bankruptcy protection, Gerdelman said.

"I really don't know what's going to happen," said Gerdelman, who is a lawyer at
Newburger & Vossmeyer in St. Louis.
The three major investors in Fertech declined to return telephone calls and could not
be reached for comment. They include Riley and two of his closest associates: North
Carolina textile executive G. Allen Mebane and Columbia, Mo., cardiologist Jerry D.
Kennett.
Riley, 46, resigned as chief executive of Fertech in February. He had taken Fertech
public in September, just five months after pleading guilty to felony counts of wire
fraud and lying to a bank and two years after emerging from personal bankruptcy.
A federal indictment had accused Riley and a partner of defrauding a Boston bank in
late 1989 in an effort to raise money for a 6,000-acre cattle ranch in Moberly, Mo.
In a deal with the U.S. Attorney's office in St. Louis, Riley pleaded guilty to two counts
with the provision that he be placed on probation rather than face a maximum of
three years in prison. U.S. District Judge Stephen N. Limbaugh reduced Riley's
sentence to three years of probation after noting his medical history of heart attacks
and bypass surgery back in 1989 when the incidents took place as well as his medical
condition last year.
Riley's past business ventures have ranged from cattle embryos to catfish farms to
cinnamon buns. Fertech operated mobile treatment systems used to clean
contaminated soil and oil spills. Based in Moberly, most of the company's business
and 60 employees were in Texas.
Mebane, Fertech's chairman, apparently pulled the plug on Fertech after sinking
more than $1 million into it.

Mebane, who owned a 32 percent stake in Fertech, had bought Riley's cattle ranch in
Moberly several years ago. Mebane is chairman of Unifi Inc., a large yarn supplier in
Greensboro, N.C.
Riley also owned 32 percent of Fertech. And Kennett, who was one of Riley's doctors,
owned 17 percent of the company.
Kennett recently sought to save Fertech and had hired a workout specialist in New
York to try to salvage the company. Neither Kennett nor Riley could convince Mebane
to put in more money.
"Dr. Kennett feels that Mebane should have done something to save the company,"
Gerdelman said. "He doesn't understand how Mebane made the decision to walk
away."
As for Riley, Gerdelman said the entrepreneur has been distressed by the partners'
fallout. "He views Kennett as having saved his life, and he views Mebane as a good
friend who has done much for him professionally."
Meanwhile, Fertech employees have scattered in the wake of the company's collapse.
Five employees from the company's emergency-response division have gone out on
their own and formed a new division for rival Environmental Management Corp.
One Fertech executive, former chief operating officer James N. Welsh, is back
working as an industry consultant. Welsh said the company owes him money.
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Fertech Environmental Goes under after a Loan Default Riley and Partners Fail to Raise More Money.
Contributors: Adam Goodman Of the Post-Dispatch - Author. Newspaper title: St Louis Post-Dispatch (MO). Publication date: April 3, 1995.
Page number: 2. 2008 St. Louis Post-Dispatch. Provided by ProQuest LLC. All Rights Reserved.

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