World Energy: Despite report, not going bankrupt

By Ron Kotrba | April 15, 2009
Posted May 8, 2009

Responding to a news article reporting World Energy Alternatives as having been tossed into involuntary Chapter 7 bankruptcy protection, World Energy released a statement on May 8 characterizing the report as "erroneous."

"World Energy Alternatives is not in bankruptcy and has not wound down its business," World Energy stated. "We continue to conduct business as usual."

There is, however, a legal dispute between World Energy and Avenir Diversified Income Trust's subsidiary, Elbow River Marketing, involving "substantial claims each party is making against the other."

In early May, Elbow River Marketing "unilaterally and without the support of any other creditors filed an unsubstantiated petition to place World Energy in Chapter 7 bankruptcy," World Energy stated. As of May 8, no court hearing or ruling had occurred. World Energy is expecting the case to be dismissed.

Avenir announced in April that Elbow River Marketing's biodiesel business lost $15.9 million in fourth quarter 2008, and expected to lose an extra $10.5 million in biodiesel charges and hedging losses in the first quarter 2009, according to World Energy.

"Avenir's foray into and hasty exit from the biodiesel market has been marked by mismanagement, poor fiscal oversight, and a lack of appropriate internal controls," World Energy stated, adding that it expects to hold Elbow River Marketing accountable for all damages; including those related to the "improperly filed petition" in bankruptcy court in May.

Boston Business Journal ran a story on May 7, which stated World Energy had been hauled into bankruptcy court by Elbow River Marketing.
 
 
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