New Energy files for bankruptcy, seeks buyer

By Holly Jessen | November 12, 2012

An idled 102 MMgy ethanol plant located in South Bend, Ind., filed for Chapter 11 bankruptcy protection on Nov. 9. New Energy Corp. received a letter from the U.S. DOE, asserting a “termination event” of a DOE loan and requested the company cooperate with Chapter 11 proceedings and sell off its assets, according to court documents.

The ethanol production facility, the oldest ethanol plant in Indiana, has been “been in discussions with the United States Department of Energy regarding the restructuring of financial obligations to the DOE and LF Financial LLC, its secured creditors,” said court documents filed in U.S. Bankruptcy Court, Northern District of Indiana. The company will continue on debtor-in-possession. The company estimated it had between 200 and 999 creditors, assets between $10 million to $50 million and liabilities between $50 million to $100 million. It also said it believed that funds would be available for distribution to unsecured creditors, to which the largest amount owed was $2.35 million.

Russ Abarr, president of New Energy Corp., told Ethanol Producer Magazine last week, before the bankruptcy papers were filed, that the ultimate goal was to recall employees and restart the plant. In all, about 40 employees were laid off while a small staff was retained to maintain the facility when it was idled in early November.