Cory Colvin, founder of the Spokane electrical contracting company Colvico Inc., is trying to reverse the sale of the company to a publicly-traded corporation that he contends withheld important information about its own operation.


Enviro-Energy Corp., of Spokane, bought Colvico from Colvin in January 2002 in exchange for $4 million in Enviro-Energy preferred shares. Colvico had revenues of about $17 million in 2001 and employed about 75 people at the time of the transaction.


Enviro-Energy is the parent company of biowaste-to-energy system developer Energy Flow Management Inc., but since its acquisition of Colvico, the company has relied on the electrical contractor to fund operations in its biowaste concern, documents submitted to regulators indicate. All the while, Colvicos revenues have decreased substantially, and losses have wiped out available capital, the documents say.


Colvin had stayed on as president of Colvico and had become a board member of Enviro-Energy after the acquisition. A series of executive changes and resignations had left Colvin as Enviro-Energys sole executive officer until last month, when he submitted his resignation as an officer and director in Enviro-Energy, another regulatory filing says.


To recapture his stock in Colvico, Colvin since has filed suit against Enviro-Energy in Spokane County Superior Court seeking to undo the sale of Colvico.


Neither Colvin nor his attorney, Carl Oreskovich, could be reached for comment.


The Superior Court suit says that Colvin would give up his preferred Enviro-Energy shares in exchange for all of the stock in Colvico and a few additional concessions.


The suit alleges that Enviro-Energys acquisition of Colvico violated the Washington State Securities Act, because Enviro-Energy misrepresented and failed to disclose certain facts.


The suit asserts that Colvin wouldnt have agreed to sell Colvico if hed known beforehand that:


A patented anaerobic process represented to Colvin as being owned by Enviro-Energy and Energy Flow Management actually was available to the company through a licensing agreement.


Enviro-Energy was liable to a couple to repay a $450,000 promissory note for a loan procured to fund one of its subsidiaries. The note currently is in default, the suit says.


Two former Enviro-Energy executives were negotiating and in the process of committing Enviro-Energy to a large commercial lease for office space and spent $30,000 improving space the company never occupied. The company later was sued over that lease agreement, the Colvin suit says.


One former executive sold a company called Isocrete to Enviro-Energy and failed to document the transaction or to obtain board approval, thereby exposing the company to claims from other business partners.


Enviro-Energy was obligated to pay more than $20,000 a month to two individuals for vague administrative services.


Enviro-Energy has acknowledged being served notice of Colvins lawsuit, but as of July 12, hadnt responded to it.


In a U.S. Securities and Exchange Commission filing, Enviro-Energy reported a $227,000 net loss for the first quarter of this year. Thats down from net income of $7,600 in the year-earlier period. The company reported first-quarter sales of $1.5 million, down from $2.1 million in the year-earlier quarter. All of the companys sales came from Colvico.


Enviro-Energys stock is publicly traded over the counter, and its current value is listed at less than 1 cent a common share.


The companys quarterly report says, Because of the many uncertainties with regards to the company (Enviro-Energy), the preferred shares, and the ability of the company to continue as a going concern, Mr. Colvin may pursue other business opportunities, some of which may be in the same industry as the company. The company does not have an employment contract with Mr. Colvin.


Reports of trouble involving the Colvico acquisition first surfaced last summer. At that time, Enviro-Energy CEO Thomas Bowers resigned and suggested in his resignation letter that improper discussions were being held about whether to rescind the acquisition. At that time, Colvin said those talks didnt go far and that no action along those lines would be taken.


Bowers, in his resignation letter, also alleged misdeeds by management, which Colvin at the time rebutted as incorrect.


Colvico, located at 2121 N. Waterworks, in Spokane Valley, employed 50 people last summer. Energy Flow Management has been dormant for about a year, the companys quarterly report says.


Colvin started Colvico in 1986 as a small concern that performed mostly residential electrical improvements. Through the years, the companys jobs became more complex and included projects such as underground electrical distribution and utility work, street lights, traffic lighting, and airport-runway lighting. In the late 1990s, the company had about 130 employees and an office in Seattle.