Iowa firm seeks to block Jefferson ethanol plant sale
Tuesday, December 22, 2009, 1:05pm CST
An Iowa company that seeks to become a producer of ethanol fuel has filed a court motion to block the sale of Renew Energy LLC's ethanol plant in Jefferson to a unit of Valero Energy Corp. for $72 million.
In a press release, ALL Fuels & Energy of Johnston, Iowa, said its ALL Fuels-Jefferson LLC subsidiary was one of four qualified bidders at the Dec. 11, auction of the Renew Energy ethanol plant. All Fuels claims it bid $77 million for the company, an offer that was announced as a bid of $72.1 million, based on a discount formula, after Valero Renewable Energy Co's bid of $72 million.
Auction managers William Blair & Co. and Bankers' Bank, the lead secured creditor in the bankruptcy proceeding, advised the auction participants that the auction closed, and announced that the Valero bid as the "best bid," even though Valero's bid was $5 million less than the All Fuels-Jefferson offer. ALL Fuels-Jefferson LLC then attempted to enter a substantially higher bid than its previous $77 million bid, but was not permitted by Blair and Bankers Bank.
ALL Fuels-Jefferson said it believes important information regarding the auction and determination of the winning bid was not brought to the bankruptcy court's attention at the Dec. 14, 2009, sale confirmation hearing, including the fact that ALL Fuels-Jefferson's bid, announced as a bid of $72.1 million, was in fact a bid of $77 million to which a discount was applied by Blair and Bankers Bank.
"We are going back to the U.S Bankruptcy Court in Madison, Wisconsin, with all of the facts of what really occurred at the auction in the hands of Bankers Bank and William Blair," said Dean Sukowatey, president and CEO of ALL Fuels & Energy.
ALL Fuels-Jefferson's bid was backed by a $65 million term loan commitment from Bankers' and equity derived from a consortium of equity partners, as well as a $55 million corn procurement and risk management commitment from a significant commodities firm.
Source: The Business Journal of Milwaukee
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