A shuttered ethanol plant in Buffalo Lake, Minn., is being turned over to its lender under a court order Monday that leaves most creditors unpaid.
The Star Tribune reports U.S. Bankruptcy Judge Katherine Constantine awarded Purified Renewable Energy’s assets to West Ventures, a unit of a New York hedge fund that financed the plant’s rebirth last year after a four-year shutdown. That revival faltered amid losses, fires and other problems, and production halted in March.
It is not clear when production might resume, but since the Chapter 11 case was filed in March, the plant has been kept in a state that would allow it to reopen.
Under the sale order, West Ventures acquired the plant for $5 million, but doesn’t have to pay that in cash. The amount is being subtracted from the more than $18 million West Ventures loaned to Purified Renewable Energy, the company formed to acquire and reopen the plant. Some creditors’ bills also must be addressed by West Ventures.
The 1997-era plant, one of the smallest in the state, faltered during its restart as the 2012 drought drove up the price of corn. Two fires in the plant and a lingering problem with wastewater compliance further hampered its revival.