Posted Oct. 25, 2010

The sale of E3 Biofuels ethanol plant in Mead, Neb., could be finalized soon, according to Rob Carringer, of CRG Partners, who is serving as the Chapter 11 trustee. It took three years standing idle and 10 months of waiting on a sale agreement in bankruptcy court. "It's taken a long time to get through a closing of that deal," he told EPM. "I hope it's closed by the middle of November."

The 25 MMgy plant produced a small amount of ethanol and was never fully commissioned in 2007 before filing for bankruptcy November 2007. The main problem was that one of the plant's two boilers exploded during the startup and testing phase. "They never were really able to reach full operation," Carringer said.

In December 2009 an auction was held, and AltEn LLC of Kansas was the winning bidder. However, everything has been in limbo for the last 10 months while legal and tax details were worked out. The company is assuming the bond debt, Carringer said, as well as half of a $750,000 tax debt. The two bondholders, whose interests are represented by an indentured trustee, Wells Fargo, are paying the other half.

The plant has a unique closed-loop design, which utilizes methane from a nearby feed lot to displace its natural gas needs. In turn, the wet distillers grains from the plant can be used to feed the 30,000 head of cattle at the feed lot. "As I understand it the buyer is going to restart everything in that closed-loop concept that they advertized in the beginning," he said, adding that although he's unsure of AltEn's plans, it would likely take from six months to a year to get the plant restarted.

Although they aren't employed full time, the ethanol plant does have a plant manager and technical manager that work as needed. When it was running, the plant had about 40 employees total, Carringer said.