Clean Burn Fuels ethanol plant heads for auction block
A foreclosure auction is scheduled to be held Aug. 24 for the 60 MMgy Clean Burn Fuels LLC corn-based ethanol plant in Raeford, N.C. The company filed for Chapter 11 bankruptcy earlier this year with the hope of emerging successfully from the process and restarting the plant by year’s end, but was unable to achieve that goal and later converted the filing to a Chapter 7 in order to liquidate the company’s assets.
The ethanol plant initially came online last fall but operated for a just a few months before shutting down and never reached its full operating capacity. John Northen, an attorney representing the plant, said mechanical issues prevented the facility from reaching its full operational potential and that those issues, combined with the high price of corn early in the year, led to the decision to idle the plant and ultimately file for bankruptcy.
Cape Fear Farm Credit, Clean Burn Fuels’ primary lender, is handling the foreclosure auction. CEO Michael Jackson said numerous consultants have reviewed the facility and its equipment and determined that re-starting the facility can be accomplished without much difficulty. “Based on the report of three experts, there is nothing majorly wrong from the standpoint of the design of the plant,” Jackson said, adding that any operational issues will not be costly to repair.
Jackson said his office has received “quite a bit” of interest from potential buyers for the plant. Northen speculated that the lender will likely bid on the facility, but Jackson said he would prefer if another ethanol producer or industrial company purchase the plant. “It would be to everyone’s advantage if someone steps in and buys the plant so we don’t have to take possession of it,” he said.
The auction will be held at noon local time on the steps of the Hoke County courthouse in Raeford. The starting bid has been set at $34.5 million.