An ethanol production facility was recently sold to a Nebraska firm. Map via Google.
After an attempt by its creditors to force it into bankruptcy, the former operator of an on-again, off-again local ethanol plant has put itself into Chapter 11.
Vireol Bio Energy, which until a sale in late October operated the 55-acre ethanol production facility at 701 S. Sixth Ave. in Hopewell, was granted permission to enter bankruptcy protection earlier this month.
It sought a safe haven following a push by a handful of Vireol creditors who claim the company and its affiliates left a trail of unpaid bills in the wake of selling the Hopewell plant to a Nebraska firm for $18 million.
The creditors, which include a division of Dominion Resources, filed an involuntary bankruptcy petition for Vireol last month, asking the court to determine whether the company can be forced into Chapter 7 to liquidate any remaining assets.
On Dec. 4, Vireol asked the bankruptcy court to have the case converted to a standard Chapter 11 case. The company admits in court filings that it is not paying its debts. Judge Keith Phillips granted the request on Dec. 14.
Attorney Bruce Arkema of DurretteCrump is representing Vireol. He said putting the company into Chapter 11 was an alternative that will allow any remaining Vireol assets to be found and potentially paid out to creditors.
He said one main remaining asset is known: A state program, which pays 10 cents for each gallon of biofuel produced, still owes Vireol money for its time in business in Hopewell.
The company, which has ties to affiliates in the United Kingdom, was offered numerous state and local incentives when it began operations in Hopewell to much fanfare in early 2014. It ceased operations at the plant just prior to selling it to Omaha, Nebraska-based Green Plains.
The city of Hopewell and the state are now looking into whether some of that money – separate from the incentive money Arkema spoke of – should be paid back given the company’s lack of long-term performance. Arkema said the payment for production grants is not in dispute.
In addition to Dominion, Vireol’s other creditors include Southern Construction Utilities and West End Machine & Welding. They claim to be owed nearly $2 million combined.
Ultimately, the Chapter 11 case will likely either transition through a reorganization plan that will plot out how it will pay back at least some money to creditors, or it could be dismissed if all sides agree on how remaining assets might be distributed.
The ethanol facility in question was built in 2010 to convert corn and other grains into ethanol as a fuel additive. Green Plains, the plant’s third owner in five years, says it will look to invest $6 million to $7 million to upgrade the facility and make it more efficient. The plant has the capacity to produce 60 million gallons of ethanol annually.
An ethanol production facility was recently sold to a Nebraska firm. Map via Google.
After an attempt by its creditors to force it into bankruptcy, the former operator of an on-again, off-again local ethanol plant has put itself into Chapter 11.
Vireol Bio Energy, which until a sale in late October operated the 55-acre ethanol production facility at 701 S. Sixth Ave. in Hopewell, was granted permission to enter bankruptcy protection earlier this month.
It sought a safe haven following a push by a handful of Vireol creditors who claim the company and its affiliates left a trail of unpaid bills in the wake of selling the Hopewell plant to a Nebraska firm for $18 million.
The creditors, which include a division of Dominion Resources, filed an involuntary bankruptcy petition for Vireol last month, asking the court to determine whether the company can be forced into Chapter 7 to liquidate any remaining assets.
On Dec. 4, Vireol asked the bankruptcy court to have the case converted to a standard Chapter 11 case. The company admits in court filings that it is not paying its debts. Judge Keith Phillips granted the request on Dec. 14.
Attorney Bruce Arkema of DurretteCrump is representing Vireol. He said putting the company into Chapter 11 was an alternative that will allow any remaining Vireol assets to be found and potentially paid out to creditors.
He said one main remaining asset is known: A state program, which pays 10 cents for each gallon of biofuel produced, still owes Vireol money for its time in business in Hopewell.
The company, which has ties to affiliates in the United Kingdom, was offered numerous state and local incentives when it began operations in Hopewell to much fanfare in early 2014. It ceased operations at the plant just prior to selling it to Omaha, Nebraska-based Green Plains.
The city of Hopewell and the state are now looking into whether some of that money – separate from the incentive money Arkema spoke of – should be paid back given the company’s lack of long-term performance. Arkema said the payment for production grants is not in dispute.
In addition to Dominion, Vireol’s other creditors include Southern Construction Utilities and West End Machine & Welding. They claim to be owed nearly $2 million combined.
Ultimately, the Chapter 11 case will likely either transition through a reorganization plan that will plot out how it will pay back at least some money to creditors, or it could be dismissed if all sides agree on how remaining assets might be distributed.
The ethanol facility in question was built in 2010 to convert corn and other grains into ethanol as a fuel additive. Green Plains, the plant’s third owner in five years, says it will look to invest $6 million to $7 million to upgrade the facility and make it more efficient. The plant has the capacity to produce 60 million gallons of ethanol annually.