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Some of the key people behind Xethanol Corp. have resurfaced with a new public company - Waste2Energy Holdings Inc. - which gained a listing on the Over-the-Counter market through a reverse merger.

Christopher d'Arnaud-Taylor, who was Xethanol's chairman and chief executive, also headed Waste2Energy (OTCBB: WTEZE.OB). He stepped down last week, in keeping with the terms of the merger agreement.

Although d'Arnaud-Taylor resigned as chairman and chief executive, he remains Waste2Energy's biggest shareholder. He will continue to serve on its board of directors, and according to Securities and Exchange Commission Filings, he also got a $300,000-a-year consulting agreement with the company.

PRIOR INVESTIGATION

Xethanol was the subject of a Sharesleuth investigation in 2006. The company replaced d'Arnaud-Taylor as chief executive a few weeks later. Taylor told Sharesleuth that, despite the presence of other Xethanol alumni at Waste2Energy, he created the company without their involvement in early 2007.

According to a recent SEC filing, d'Arnaud-Taylor, his wife and a limited liability company he controls hold 6 million Waste2Energy shares, plus warrants to buy an additional 4 million shares exercisable at 50 cents a share.

Waste2Energy's stock closed Thursday at $1.11 a share. That gave the company a market value of more than $55 million. According to the SEC filing covering the reverse merger, officers and directors control 44 percent of the company's shares.

REVERSE MERGER AND PRIVATE PLACEMENT

Waste2Energy Holdings was formed through the merger of Waste2Energy Inc. and Maven Media Holdings Inc., a public shell company in Chula Vista, Calif. The deal was consummated on May 29, with shareholders of Waste2Energy getting 46 million shares of the combined company.

In the past three months, Waste2Energy has raised $2.5 million through a series of private placements, according to SEC filings. In return for the money, it issued $2.5 million in notes paying 10 percent a year in interest, plus 2.5 million shares of its stock. The company has not identified any of the investors.

Waste2Energy's SEC filing on the reverse merger noted Taylor's ties to Xethanol, including his role as a defendant in a securities class-action suit that the company settled for $2.8 million.

"Appropriate disclosure concerning any XNL issues was included in the 8-K filed with the SEC and will be included in other filings as appropriate,'' Taylor told Sharesleuth in an email response to our questions. "However, there is no other connection with XNL that should be made.''

GAS FROM GARBAGE

Waste2Energy says it has a system for converting garbage and other solid waste into burnable gases. Its main subsidiary is pursuing deals to build cogeneration plants at industrial facilities and other locations to turn those wastes into "renewable green power.''

Xethanol claimed it had a process for turning wood chips, grass clippings and other plant material into ethanol. But the company never produced any commercial quantities of ethanol using the technology and eventually abandoned that business. It is now known as Global Energy Holdings Group Inc. (AMEX: GNH). The company's shares, which topped $16 in early 2006, now trade for less than 20 cents.

SCOTTISH PLANT

Waste2Energy is involved in the construction of a waste-to-energy plant in Dumfries, Scotland, for a British company, Ascot Environmental Ltd. According to an SEC filing at the time of the merger, the waste-to-energy side of the business had revenue of $2.68 million for the nine months that ended Dec. 31, primarily from work on the Scottish plant. It reported a net loss of $4.01 million for that period.

The Scottish plant, known as the Dargavel Energy from Waste Facility (pdf), is in the final commissioning stages, and should be processing waste soon, Taylor said. Waste2Energy's strategy, he said, is to capitalize on that project by selling other units to customers around the world.

"To support this roll-out, W2e has organized a design and fulfillment team in Scotland located in close proximity to the Dargavel site and forged a strategic alliance with a Scottish manufacturing company with a leadership position in thermal engineering processes.''

XETHANOL ALUMNI

Two other key players at Xethanol - Franz A. Skryanz and Jeffrey Langberg -- also have been involved in Waste2Energy.

Skryanz was secretary and treasury of Waste2Energy before it merged with Maven Media Holdings. SEC filings show that he got 500,000 shares in the combined company. Skryanz was an officer and director of Xethanol.

Taylor said Skryanz is no longer an officer or director of Waste2Energy and is retiring.

Waste2Energy said in its SEC filing on the reverse merger that an entity called SilverFox LLC has provided services to the company under two consulting contracts. Other SEC documents have listed Langberg as SilverFox's managing member. Langberg was a Xethanol director and was one of its investment bankers.

SilverFox got 300,000 shares of Waste2Energy stock under the first consulting contract, which was awarded in May 2008 and called for the firm to find potential investors in the company. According to the SEC filing on the reverse merger, the deal also included warrants to buy 300,000 more shares at 75 cents each.

SilverFox got a new contract in November that calls for it to identify and screen potential buyers for Waste2Energy's plants. According to the merger filing, that agreement provides for a finder's fee of 10 percent of the purchase price for each sale it brings in.

Taylor told Sharesleuth that SilverFox LLC is "a tad more'' than just Langberg, and that Langberg is no long managing member.

Waste2Energy's latest SEC filings list the company's headquarters at the same New York City address used by Xethanol. The telephone number also is the same as Xethanol's old number. Xethanol had originally leased that office space from Langberg.

The company is set to move to a new headquarters in Greenville, S.C.

A ROCKY START

Last July, Waste2Energy was sued by the former owner of EnerWaste International Corp., which it had acquired the previous year for $5 million. Thomas L. Dutcher alleged that Waste2Energy had defaulted on the payments for the business, whose "Batch Oxidization System" technology is at the core of its current activities.

Waste2Energy countersued, saying that Dutcher misled the company about the state of EnerWaste's finances and business. EnerWaste's European affiliate, based in Iceland, went bankrupt late last year because of the collapse of that country's economic system.

The two parties settled their differences in April, just before Waste2Energy arranged its reverse merger with Maven Media Holdings.

Xethanol Corp. is trying to unload a former pharmaceutical plant in Georgia that had been the centerpiece of its plan to turn wood chips, paper pulp and other organic waste into ethanol.

The Augusta Chronicle reported last week that Xethanol (AMEX: XNL) told workers who have been tending the property that it was for sale. When Xethanol and a joint venture partner bought the idled plant in August 2006, they said it would be retrofitted to produce 50 million gallons of ethanol a year, and would employ as many as 100 people.

In the wake of the news, the Chronicle’s business editor wrote this column, which we thought our readers might be interested in seeing.

We believe the information that Sharesleuth uncovers about companies like Xethanol is important not only to investors, but to the communities those companies involve in their ventures. They, too, must assess the risks.

Xethanol reported in a Securities and Exchange Commission filing in November that it had sold its mothballed ethanol plant in Hopkinton, Iowa for $500,000. It once billed that plant as its “research and development testbed.’’

The company also disclosed that it had sold 47 acres of undeveloped land in Blairstown, Iowa, the home of its only operating ethanol plant. And Xethanol said that it was talking to a potential buyer for its property in Spring Hope, N.C. The company had said it would convert the former fiberboard plant there into a facility that would produce 35 million gallons of ethanol a year.

We’d hate for anyone to think that we’re fixated on one company, but when we heard about Xethanol Corp.’s latest plan to make ethanol from citrus peels, we had to take a closer look.

Here’s what we found: Xethanol’s new partner, Renewable Spirits LLC of Boca Raton, Fla., was founded and financed by Raymond Scott Stevenson, former vice president of taxation at Tyco International Ltd. Two weeks ago, Stevenson was sentenced to three years in prison after admitting that he deliberately failed to report $170 million of income on Tyco’s 1999 tax return. Letters submitted to the judge on Stevenson’s behalf included one from a U.S. Department of Agriculture scientist who worked with Renewable Spirits on the citrus-to-ethanol technology, attesting to its potential benefits to society. As part of his plea agreement, Stevenson will make a different sort of contribution to society, by paying a $250,000 fine and cooperating in any further Tyco investigations.

Renewable Spirits filed a new annual report with the Florida Division of Corporations this week, listing Stevenson’s wife, Gwenn, as manager. The company also added a new president, Doug Westfall.

Xethanol Corp.’s partner in developing ethanol projects in New England has terminated their joint venture, citing concerns about the company and its technology.

Global Energy and Management LLC notified Xethanol (AMEX: XNL) of the decision late last week. Lee R. Tyrol, a principal of Global Energy, also resigned as manager of the partnership, called NewEnglandXethanol LLC.

Tyrol confirmed the termination to Sharesleuth.com on Friday. He said that Global Energy had lined up suppliers of raw materials for conversion to ethanol, had located plant sites and had identified buyers for the end product.

In the end, Tyrol said, Xethanol was unable to deliver a production process that would enable the plants to turn organic waste into ethanol on a large-scale, commercial basis.

Xethanol has billed itself as a leader in the race to develop a method for making ethanol from biomass, such as wood chips or plant material, instead of conventional feedstocks like corn

“They were supposed to provide us with technology, which they didn’t,” Tyrol said. “Obviously, there is no silver bullet.’’

Sharesleuth published an investigative report on Aug. 7 questioning Xethanol’s claims that it was poised to produce so-called cellulosic ethanol. The story noted that Xethanol had acquired nearly all of its technology from government and university labs, had spent relatively little on research and development and had offered no evidence that it was able to produce cellulosic ethanol in large batches or at prices competitive with other fuels.

The story also raised questions about the backgrounds of Christopher d’Arnaud-Taylor, Xethanol’s then-chairman and chief executive, and others involved in the company.

Xethanol and Global Energy had announced their partnership in April. At the time, the partners told the Associated Press that they hoped to use waste products from breweries, pulp from paper plants, grass clippings and other materials to make ethanol.

The agreement called for Global Energy to contribute $1.5 million to NewEnglandXethanol -- $250,000 on the signing of the organizational and operating agreements, $250,000 within 90 days of that event, and $1 million upon approval of the plan to build the first plant.

Xethanol, which is based in New York, has two other joint ventures in the Southeast. Those entities each have acquired an idled factory that they plan to retrofit for ethanol production. One is an Augusta, Ga.; the other is in Spring Hope, N.C.

Tyrol said Global Energy initially had no qualms about getting involved with Xethanol, because several big investment firms, including Goldman Sachs and Co., had already bought millions worth of stock in the company.

"I assumed that the folks on Wall Street had more than done their due diligence on this project,'' he said.

Xethanol’s shares have fallen from a high of $16.18 in April to a closing price of $2.39 on Friday. Tyrol said Global Energy, which got Xethanol warrants as part of its deal, suffered along with other Xethanol stockholders.

Xethanol Corp. has replaced Christopher d’Arnaud-Taylor as chief executive officer.

The new boss is Louis B. Bernstein, a member of Xethanol’s board and a retired assistant general counsel at Pfizer Inc. Xethanol said Bernstein would run the company on an interim basis while it searches for a permanent CEO, as well as a chief operating officer.

A spokesperson for Xethanol (XNL: AMEX) told Reuters that d’Arnaud-Taylor will remain an adviser to the company.

A standard background check shows that Bernstein has been a Xethanol director since June 2005, a few months after the company went public through a reverse merger with Zen Pottery Equipment Inc. of Denver. He recently retired from Pfizer after 30 years of service.

Bernstein also is a director at United Energy Corp., a New Jersey company that sells specialty chemicals used in oil and gas production, photo finishing and other fields. He joined its board in September 2003.

A check of United Energy’s SEC filings shows that five people connected to that company also have ties to Xethanol.