Successful Plan of Reorganization of an Ethanol Producer

Renova Energy

Boise, Iowa

Challenge

Ethanol Plants. $75 million sales. $140 million debt. 3 plants in 3 states and 3 intertwined Chapter 11 cases.

• Unfinished Idaho plant with numerous mechanics’ liens.
• Protect profitable Wyoming plant and marketing distribution business while maintaining corn supply and customer base.
• Three bank group at odds with each other including separate counsel, all adversarial to London owners.
• Complexity of absent UK owners in a small Wyoming Bankruptcy Court filled with New York attorneys representing the stakeholders.
• 1st day Motion on consensual DIP financing finally approved after 60 days.

Solution

• MorrisAnderson engaged as Chief Restructuring Officer to manage the bankruptcy process.
• Increased good ethanol yield at Wyoming plant with introduction of chlorine to mitigate infection issues.
• Renegotiated critical corn contracts.
• Terminated UK management and their excess /no value costs.
• Cost reductions on rent and accounting services.

Results

• Profitable Wyoming plant and marketing distribution business with confirmed Plan of Reorganization, saving 50 jobs.
• Three bank group now new owners of profitable business.
• One of few ethanol businesses emerging profitably from Bankruptcy.
• Idaho plant assets transferred to mechanics’ lien holders.