Prime BioSolutions, an Omaha-based ethanol technology and development company, is poised to make a bid for the bankrupt Mead, Neb., ethanol facility that pioneered the use of Prime’s closed loop system.
“We’ve got a restructuring plan we’re working on but we’ve got to follow the rules of the game,” said David Hallberg, Prime’s founder. “We’re ready to move when it’s time.”
E3 Biofuels filed for Chapter 11 protection six months after opening and closed abruptly in December. It’s in the process of restructuring its finances, fixing mechanical problems and positioning the company for a re-start. The timetable for reopening the plant will be dictated by a Kansas City, Kan., bankruptcy court.
E3 is a corn dry-grind ethanol plant that uses its distillers wet grains to feed 28,000 head of cattle at an adjacent feedlot. Cattle manure is converted to biogas to power the plant.
One year ago a boiler explosion prevented the plant from coming on line fully and it never attained its projected 25 MMgy capacity.
In 2006, Hallberg parted ways with E3 partner Dennis Langley and resigned as CEO. Prime is now a minority shareholder in a holding company that owns E3. Langley retained 80 percent ownership. The two former business partners also share the closed loop patent in another holding company.
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Prime has temporarily shelved plans to develop another closed loop Nebraska plant while it concentrates its efforts into resurrecting E3.
Langley, a Kansas City businessman, has declined comment about E3’s status. E3’s bankruptcy filing lists $10 million in assets and $73 million in liabilities. Major bondholders CIT Group and Oppenheimer have an estimated $40 million outstanding; Wells Fargo Bank in Omaha is owed $57 million. More than $3.25 million has been filed in construction liens. It lost six directors in 2007.
Langley’s attorney, Jeffrey Deines, said Langley is working with the major creditors to get the plant operational. He declined to say whether Langley will remain the majority owner when the restructuring is completed.
Staff Writer Sarah Smith has taken an in-depth look at the E3 bankruptcy. Her story will appear in the March 2008 edition of Ethanol Producer Magazine.
