The plan will pay Vireol’s creditors $0.29 on the dollar. Map via Google.
The companies owed money by the bankrupt former operator of a Hopewell ethanol plant got a clearer view last week of how much money they might recoup.
Vireol Bio Energy, which operated the 55-acre ethanol production facility at 701 S. Sixth Ave. in Hopewell until a sale last October, received confirmation last week for its Chapter 11 bankruptcy liquidation plan, according to court documents filed in Richmond federal court.
The confirmed plan will pay creditors around $0.29 for every $1 they’re owed by Vireol. That amounts to about $1.7 million to potentially be paid out on around $4.98 million in debt claims.
While that doesn’t come close to making the creditors whole, it could have been worse.
The other offer on the table was to $0.05 on the dollar, an option that was avoided thanks to a settlement reached between some of the creditors and Future Fuels, a U.K. company that owned the Hopewell facility and leased it back to VBE.
Future Fuels had a claim for about $20 million of VBE’s $28 million in debt. Vireol Bio Energy Holdings, another English company set up to own VBE, has a claim for $3.7 million. Future Fuels owned much of VBE Holdings, court records show.
While they’re all technically separate legal entities, VBE’s creditors filed lawsuits prior to the bankruptcy arguing that the VBE and Future Fuels companies are all ultimately connected and therefore all responsible for the debts.
The settlement approved last week calls for wiping out Future Fuels’ claims to any assets recovered in bankruptcy in exchange for what amounts to immunity from being sued in the future by any of the creditors related to VBE debt, putting to rest any legal debate over whether the entities are synonymous and therefore on the hook.
The next step in VBE Chapter 11 process is to recover the remaining assets, the largest of which is a $750,000 grant from the state Virginia Biofuel Incentive Grant program in 2015.
VBE claims it qualifies for the grant based on the biofuel it produced and sold from Hopewell in 2015 by converting corn and other grains into ethanol as a fuel additive.
Vireol is represented in its bankruptcy by Richmond attorney Bruce Arkema of DurretteCrump.
Arkema said VBE is working to complete the application for the grant money and he expects it to be paid soon.
The bankruptcy estate is also trying to recoup around $900,000 through 13 so-called preference and turnover actions, which are mini-lawsuits that seek to recover money paid out to various VBE vendors in the 90 days prior to and after the bankruptcy filing in December.
Among the companies being sued in the preference actions is Shell Energy, which received a payment from VBE of around $364,000 after the bankruptcy was filed.
It is also arguing that around $300,000 paid out of the proceeds of the sale of the Hopewell facility to satisfy mechanics liens should be paid back into the bankruptcy estate.
The Hopewell plant was built by another company in 2010 and purchased by Future Fuels in 2013. VBE began operations there in 2014, after being offered state and local incentives. It ceased operations at the plant less than two years later, just prior to selling it to Omaha, Nebraska-based Green Plains.
VBE’s Chapter 11 case stems from an attempt by its creditors late last year to force it into Chapter 7 bankruptcy. The company ultimately put itself into Chapter 11, while it worked out a plan to deal with its debts and search for remaining assets.
Bankruptcy documents show the plant produced $78.56 million in revenue in its fiscal year 2014. That dropped to $35.11 million the following year, during which the plant was operating at a loss of nearly $13 million.
Correction: A previous version of this story incorrectly listed the amount of unsecured debt claims owed by VBE as $8 million. The correct figure is $4.98 million, according to court records.
The plan will pay Vireol’s creditors $0.29 on the dollar. Map via Google.
The companies owed money by the bankrupt former operator of a Hopewell ethanol plant got a clearer view last week of how much money they might recoup.
Vireol Bio Energy, which operated the 55-acre ethanol production facility at 701 S. Sixth Ave. in Hopewell until a sale last October, received confirmation last week for its Chapter 11 bankruptcy liquidation plan, according to court documents filed in Richmond federal court.
The confirmed plan will pay creditors around $0.29 for every $1 they’re owed by Vireol. That amounts to about $1.7 million to potentially be paid out on around $4.98 million in debt claims.
While that doesn’t come close to making the creditors whole, it could have been worse.
The other offer on the table was to $0.05 on the dollar, an option that was avoided thanks to a settlement reached between some of the creditors and Future Fuels, a U.K. company that owned the Hopewell facility and leased it back to VBE.
Future Fuels had a claim for about $20 million of VBE’s $28 million in debt. Vireol Bio Energy Holdings, another English company set up to own VBE, has a claim for $3.7 million. Future Fuels owned much of VBE Holdings, court records show.
While they’re all technically separate legal entities, VBE’s creditors filed lawsuits prior to the bankruptcy arguing that the VBE and Future Fuels companies are all ultimately connected and therefore all responsible for the debts.
The settlement approved last week calls for wiping out Future Fuels’ claims to any assets recovered in bankruptcy in exchange for what amounts to immunity from being sued in the future by any of the creditors related to VBE debt, putting to rest any legal debate over whether the entities are synonymous and therefore on the hook.
The next step in VBE Chapter 11 process is to recover the remaining assets, the largest of which is a $750,000 grant from the state Virginia Biofuel Incentive Grant program in 2015.
VBE claims it qualifies for the grant based on the biofuel it produced and sold from Hopewell in 2015 by converting corn and other grains into ethanol as a fuel additive.
Vireol is represented in its bankruptcy by Richmond attorney Bruce Arkema of DurretteCrump.
Arkema said VBE is working to complete the application for the grant money and he expects it to be paid soon.
The bankruptcy estate is also trying to recoup around $900,000 through 13 so-called preference and turnover actions, which are mini-lawsuits that seek to recover money paid out to various VBE vendors in the 90 days prior to and after the bankruptcy filing in December.
Among the companies being sued in the preference actions is Shell Energy, which received a payment from VBE of around $364,000 after the bankruptcy was filed.
It is also arguing that around $300,000 paid out of the proceeds of the sale of the Hopewell facility to satisfy mechanics liens should be paid back into the bankruptcy estate.
The Hopewell plant was built by another company in 2010 and purchased by Future Fuels in 2013. VBE began operations there in 2014, after being offered state and local incentives. It ceased operations at the plant less than two years later, just prior to selling it to Omaha, Nebraska-based Green Plains.
VBE’s Chapter 11 case stems from an attempt by its creditors late last year to force it into Chapter 7 bankruptcy. The company ultimately put itself into Chapter 11, while it worked out a plan to deal with its debts and search for remaining assets.
Bankruptcy documents show the plant produced $78.56 million in revenue in its fiscal year 2014. That dropped to $35.11 million the following year, during which the plant was operating at a loss of nearly $13 million.
Correction: A previous version of this story incorrectly listed the amount of unsecured debt claims owed by VBE as $8 million. The correct figure is $4.98 million, according to court records.