CLEARFIELD – Bionol Clearfield LLC. (“Bionol”), announced Wednesday that it, along with its affiliates, Bioenergy Holdings LLC and Bionol Holdings LLC, each filed a voluntary petition for chapter 7 relief in the United States Bankruptcy Court in Delaware. Bionol anticipates that its assets will be sold through the bankruptcy process as a functioning ethanol plan, for the benefit of its employees, creditors, and other stakeholders.
Bionol is a producer of fuel grade, corn-based ethanol and its by-products, wet and dry distillers grains. Bionol operates a 110MM gallon per year plant that opened in 2010 and was transitioned into a hot idle state in June 2011. Prior to initiating operations, Bionol entered into an offtake agreement with Getty Petroleum Marketing Inc. whereby Getty was to purchase all the ethanol produced by Bionol at rates that would absorb the risk in the commodity markets. Getty defaulted on that agreement last year and Bionol has been selling its ethanol on the open market since then. Bionol’s claims arising from Getty’s default is the subject of an ongoing arbitration process.
As a result of the wild fluctuations in the corn and ethanol markets, Bionol kept the plant in a hot idle status in June 2011 following a week of summer maintenance shut down. Since then, Bionol and its lenders decided that the best course for the future, given Bionol’s limited liquidity, would be a sale of the plant through a bankruptcy proceeding.
Bionol anticipates that this sale process may require four to six months to complete, although this will be entirely dependent upon the business judgment of the trustee appointed in Bionol’s bankruptcy case, and subject to court approval.