Glacial Lakes begins legal action

May 22, 2007

Glacial Lakes Energy LLC announced Thursday that it is moving forward with a $5 million breach of contract action against Granite Falls Energy LLC. The request for arbitration follows the termination of a management agreement between the two companies. The action was filed with the American Arbitration Association, following arbitration provisions in the management agreement between the two parties.

Glacial Lakes Energy is seeking approximately $5.3 million in damages for payments for services rendered and future payments under the agreement. Glacial Lakes Energy holds 20.9 percent of membership units issued and outstanding for Granite Falls Energy, making Glacial Lakes the largest single member owner of the limited liability company.

"We managed the construction of that project under budget and ahead of schedule, and brought that plant on line during a period of unmatched profitability in the ethanol industry," said Tom Branhan, CEO of Great Lakes Energy. "We simply do not believe Granite Falls Energy had a basis to terminate the management contract."

Arbitration on the matter is expected to take up to 12 months.

Posted May 25, 2007, at 10:56 a.m.

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