Beatrice Biodiesel files for bankruptcy

By Bryan Sims | September 16, 2008
Web exclusive posted Sept. 22, 2008 at 10:50 a.m. CST

Beatrice Biodiesel LLC has filed for Chapter 7 bankruptcy as its idle 50 MMgy biodiesel facility in Gage County, Neb., has become the property of Minnesota-based AgStar Financial Services.

According to Gage County Director of Economic Development Terri Dageford, Beatrice Biodiesel initially attempted to file Chapter 11 bankruptcy on Aug. 21 to protect stakeholder interest after its parent companies, U.S. Biofuels Inc. and Australian Ethanol LTD of Perth, Australia, failed to supply sufficient funds to cover outstanding debt before starting up the plant. Beatrice Biodiesel was later forced into Chapter 7 bankruptcy by a county judge.

Agri-Energy Ltd., another of Beatrice Biodiesel's affiliates, shed assets in Australia to concentrate on a rescue plan for the Beatrice plant, but was unsuccessful in its efforts.

The soybean oil-based plant began construction in August 2007 and was scheduled to be completed in the fall of 2007, however, due to mounting financial pressures and rising feedstock costs construction was completed in March. The plant has yet to operate.

The facility was touted as one of the largest biodiesel plants in the United States utilizing a second-generation biodiesel process technology from Axens North America, a large European petroleum firm.

As a result, approximately 20 companies and businesses filed more than $3.8 million in liens for unpaid services; including five over $400,000, according to Dageford.

Beatrice Biodiesel and Agri-Energy attempted to find investors to buy the plant to provide working capital, but their efforts were unsuccessful. According to Dageford, there are potential suitors that have expressed interest in taking ownership of the plant, but details of their identity were not confirmed.

"I do know that there are groups looking at it very seriously," she said. "It's ready for production; we just need an owner. The good news is that it will be sold and it will be in production making biodiesel, but when we don't know; hopefully soon."
 
 
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