Central Illinois Energy sale set for April 23

By Sarah Smith | April 08, 2008
Web exclusive posted April 14, 2008 at 12:35 p.m. CST

A bankruptcy sale involving the Central Illinois Energy ethanol plant near Canton, Ill., will occur April 23. The sale was postponed from its initial April 9 date to give senior creditors time to prepare.

"There's a consortium of senior lenders prepared to buy the plant but I don't know the makeup of that group," said bankruptcy attorney Barry Barash. Credit Swisse and Whitebox Advisors, a Minneapolis hedge fund, have gone on record in bankruptcy court to take over the 37 MMgy plant, which was approximately 95 percent complete when work was halted in late 2007 due to financial problems. The senior creditors are owed approximately $80 million and have indicated they will bid their debt and pay off mechanics liens estimated at around $25 million. It's estimated that another $25 million will be necessary to complete work on the corn-fueled ethanol plant, Barash said.

In December 2007, Massive cost overruns plunged the co-op built plant into bankruptcy. Original estimates of around $40 million mushroomed to $130 million, leaving investors, a consortium of 260 farmers and locals, struggling to pay the bills. They likely have lost their investment, Barash said.

During a March hearing, the bankruptcy judge rejected a bid by Florida-based NexGen Biofuels, which proposed buying the plant for $20 million to $25 million. The original investors also rejected the bid.