Pine Lake Corn Processors successfully emerges from Chapter 11 bankruptcy
November 11, 2009
Press release posted Dec. 7, 2009, at 2:50 p.m. CST
On Dec. 4, the bankruptcy court for the Northern District of Iowa issued an order confirming the Plan of Reorganization of Pine Lake Corn Processors. The ethanol plant had originally filed for Chapter 11 exactly one year before, on Dec. 4, 2008, after suffering losses due to rapidly changing corn and ethanol prices and losing its operating line of credit. At the time of the bankruptcy filing, the ethanol plant had been idled, however the plan restarted production in late December after working out arrangements with its senior lenders and ethanol marketing firm. The effective date for the plan will be Dec. 23.
Brad Kruse, of the BrownWinick law firm, attorney for debtor, stated: "We are extremely happy that Pine Lake Corn Processors was able to produce such a positive result from a bankruptcy filing that began with a closed plant and no operating line of credit."
Subsequent negotiations with its senior lenders, its largest unsecured creditor and its marketing company allowed Pine Lake to put together a Plan of Reorganization that was overwhelmingly supported by the creditors when put to a vote in November. As part of that plan, Prairie Land Cooperative agreed to take equity in lieu of a payment of its administrative claim and rejection damage claim which totaled more than $14 million. Prairie Land Cooperative will own approximately 85 percent of the company. In addition, the secured banks agreed to a restructuring of their lines of credit which totaled approximately $14.5 million. The smallest creditors will be paid in full and the remaining creditors will be paid thirty cents to the dollar over the next five years.
The reorganized company will continue to operate as Pine Lake Corn Processors LP. The plant employs more than thirty people and uses about 12 million bushels of corn to produce about 30 MMgy. The current management and employees will remain in place.
Scott Zabler, general manager, stated: "We are very pleased that we were able to turn the plant around in exactly one year and are very optimistic that, with the terms worked out with our major lenders, the plant will be profitable and on a solid financial footing. I am especially proud of our employees who stood by us through some grim months in 2008 and pitched together to make this turnaround a success."
SOURCE: BROWN, WINICK, GRAVES, BASKERVILLE & SCHOENEBAUM PLC
On Dec. 4, the bankruptcy court for the Northern District of Iowa issued an order confirming the Plan of Reorganization of Pine Lake Corn Processors. The ethanol plant had originally filed for Chapter 11 exactly one year before, on Dec. 4, 2008, after suffering losses due to rapidly changing corn and ethanol prices and losing its operating line of credit. At the time of the bankruptcy filing, the ethanol plant had been idled, however the plan restarted production in late December after working out arrangements with its senior lenders and ethanol marketing firm. The effective date for the plan will be Dec. 23.
Brad Kruse, of the BrownWinick law firm, attorney for debtor, stated: "We are extremely happy that Pine Lake Corn Processors was able to produce such a positive result from a bankruptcy filing that began with a closed plant and no operating line of credit."
Subsequent negotiations with its senior lenders, its largest unsecured creditor and its marketing company allowed Pine Lake to put together a Plan of Reorganization that was overwhelmingly supported by the creditors when put to a vote in November. As part of that plan, Prairie Land Cooperative agreed to take equity in lieu of a payment of its administrative claim and rejection damage claim which totaled more than $14 million. Prairie Land Cooperative will own approximately 85 percent of the company. In addition, the secured banks agreed to a restructuring of their lines of credit which totaled approximately $14.5 million. The smallest creditors will be paid in full and the remaining creditors will be paid thirty cents to the dollar over the next five years.
The reorganized company will continue to operate as Pine Lake Corn Processors LP. The plant employs more than thirty people and uses about 12 million bushels of corn to produce about 30 MMgy. The current management and employees will remain in place.
Scott Zabler, general manager, stated: "We are very pleased that we were able to turn the plant around in exactly one year and are very optimistic that, with the terms worked out with our major lenders, the plant will be profitable and on a solid financial footing. I am especially proud of our employees who stood by us through some grim months in 2008 and pitched together to make this turnaround a success."
SOURCE: BROWN, WINICK, GRAVES, BASKERVILLE & SCHOENEBAUM PLC
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