South Dakota Ethanol Producer Files for Bankruptcy

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Posted: 8:30 AM Nov 5, 2008
Last Updated: 8:37 AM Nov 5, 2008
Reporter: Mike Plews

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Sioux Falls , South Dakota based Ethanol producer VerSun has filed for relief under chapter 11 and has announced the indefinite delay of the opening of it’s newest plant.

The startup plant in Janesville, Minnesota would have produced 110 million gallons of Ethanol per year.

In a press release VeraSun says, “Construction on the Janesville facility is nearly completed and the plant was scheduled to begin operations prior to the end of the year. Construction began in January 2007 and ownership of the plant moved under VeraSun on April 1, 2008, following its merger with US BioEnergy. Most of the 53 employees will be furloughed immediately.”

VeraSun was founded in 2001 and has a fleet of 16 production facilities with 14 currently in operation.

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Posted by: O on Nov 5, 2008 at 03:09 PM
Likely the first of many failures - the shakeout has begun. With the lack of bankruptcy financing (the biggest lenders are getting out of the business) these quickly turn to liquidations. Companies like ADM and Cargill will be able to run in and pick up assets for pennies on the dollar. The investors will see their investments wiped out, and all the commodities sellers who had long contracts with the plants to sell them $7 corn will be forced to sell their positions for the current $3.90/bushel.