Cascade Grain purchased by creditor

By | December 09, 2009
Press release posted Dec. 10, 2009, at 10:52 a.m. CST

JH Kelly LLC Ethanol (Kelly), a joint venture between TIC - The Industrial Company and JH Kelly Holdings LLC, confirmed that it was the successful bidder at the Dec. 9 U.S. Bankruptcy Court Chapter 7 auction of the ethanol plant previously owned by Cascade Grain Products LLC. Kelly will take ownership of the facility and officially close the court-approved sale in the next few weeks.

Kelly representatives are now evaluating a wide range of alternatives for the facility including a potential phased restart or a complete sale to a third party. JH Kelly LLC President Mason Evans said, "We were very disappointed when Cascade Grain succumbed to the downturn in the ethanol market, as did many ethanol plants across the country, but we know the plant is well built and capable of producing high quality product at name-plate capacity. We now need to assess the best path forward for the facility and our company."

For over a year, Kelly has been attempting to recover millions awarded to it by an independent panel from the American Arbitration Association. Cascade's bankruptcy filing stayed all collection efforts and forced Kelly to pursue its claims along with other creditors in the bankruptcy process. According to Evans, "While you never wish to see your customers go through this, we're pleased to have the bankruptcy process complete so that we can focus on the future of the plant."

The Cascade Grain facility is a greenfield 108 MMgy undenatured fuel-grade ethanol plant located on a 43.62 acre site in Port Westward, Ore. The plant is located at the 53 mile marker of the
Columbia River and has a 1,200-foot-long deep-draft dock, giving the facility ready access to both ocean-going and Columbia River barge transportation. The plant started commercial operation in June 2008 and successfully passed all performance testing requirements before succumbing to a downturn in the ethanol market and a significant shortfall in operating capital.