March 3, 2013 Sunday
Biodiesel producer using canola seed goes bankrupt
Federal subsidy aimed to spur crop-based fuels
By Tom Sowa
One of the region's firstproducers of biodiesel from
canola has filed for bankruptcy, leaving more than
$3.8 million in debts, court records show.
Inland Empire Oilseeds LLC, which began producing
biodiesel in 2009 in Odessa Wash., closed its doors in
December and filed for Chapter 7 reorganization in the
Eastern District of Washington bankruptcy court.
At one point, Inland Empire Oilseeds was crushing 80
tons of canola seed per day, according to Keith Bailey,
the manager of two agriculture cooperatives thatwere
majority investors in the company:Odessa Union
Warehouse Cooperative andReardan Grain Growers.
The venture was funded in part with a $1 million
Energy Freedom Loan through the state of Washington.
That loan was managed by the Odessa Public
Development Authority, which owns the production
facility.
The operation also received more than $2 million in
loans from the U.S.Department of Agriculture.
The goal was to produce 8 million gallons of biodiesel
per year.
As the plant began operations, the federal government
provided a $1 per gallon subsidy to spur the
production of crop-based fuels. In mid-2010 that
subsidy was eliminated, and Inland Empire
Oilseedsclosed its doors.
In 2011, the government restored that subsidy and the
company was restructured, with the two co-ops
moving to a minority stake.
The majority stake - roughly 75 percent - was taken
by two new Inland Empire Oilseeds managers, Joel
Edmonds and Wally Kempe.
The co-ops and other investors, including Avista
Corp., own the remaining 25 percent, according to
court records.
The bankruptcy documents list assets of about
$1.67million. The $3.8 million in liabilities consists of
debts of $2.6 million to unsecured creditors and $1.2
million to secured creditors such as the co-ops.
The growers invested in the business because it
provided farmers more crop options and new ways to
diversify their markets, Bailey said.
Canola seed came to the plant from Eastern
Washington, Idaho, Montana, North Dakota and
Canada, Bailey said.
Bailey said there's a possibility the plant can be
reopened, as the Odessa Public Development Authority
has issued a request for proposals to reopen it.
"There's a possibility, but I can't say how good it is,"
Bailey said. "I hope so, because that's better for us
than total liquidation."
Copyright © 2010 LexisNexis, a division of Reed
Elsevier Inc. All Rights Reserved.
http://www.world-
grain.com/news/news%20home/LexisNexisArticle.asp
x?articleid=1846856917
Biodiesel producer using canola seed goes bankrupt
Federal subsidy aimed to spur crop-based fuels
By Tom Sowa
One of the region's firstproducers of biodiesel from
canola has filed for bankruptcy, leaving more than
$3.8 million in debts, court records show.
Inland Empire Oilseeds LLC, which began producing
biodiesel in 2009 in Odessa Wash., closed its doors in
December and filed for Chapter 7 reorganization in the
Eastern District of Washington bankruptcy court.
At one point, Inland Empire Oilseeds was crushing 80
tons of canola seed per day, according to Keith Bailey,
the manager of two agriculture cooperatives thatwere
majority investors in the company:Odessa Union
Warehouse Cooperative andReardan Grain Growers.
The venture was funded in part with a $1 million
Energy Freedom Loan through the state of Washington.
That loan was managed by the Odessa Public
Development Authority, which owns the production
facility.
The operation also received more than $2 million in
loans from the U.S.Department of Agriculture.
The goal was to produce 8 million gallons of biodiesel
per year.
As the plant began operations, the federal government
provided a $1 per gallon subsidy to spur the
production of crop-based fuels. In mid-2010 that
subsidy was eliminated, and Inland Empire
Oilseedsclosed its doors.
In 2011, the government restored that subsidy and the
company was restructured, with the two co-ops
moving to a minority stake.
The majority stake - roughly 75 percent - was taken
by two new Inland Empire Oilseeds managers, Joel
Edmonds and Wally Kempe.
The co-ops and other investors, including Avista
Corp., own the remaining 25 percent, according to
court records.
The bankruptcy documents list assets of about
$1.67million. The $3.8 million in liabilities consists of
debts of $2.6 million to unsecured creditors and $1.2
million to secured creditors such as the co-ops.
The growers invested in the business because it
provided farmers more crop options and new ways to
diversify their markets, Bailey said.
Canola seed came to the plant from Eastern
Washington, Idaho, Montana, North Dakota and
Canada, Bailey said.
Bailey said there's a possibility the plant can be
reopened, as the Odessa Public Development Authority
has issued a request for proposals to reopen it.
"There's a possibility, but I can't say how good it is,"
Bailey said. "I hope so, because that's better for us
than total liquidation."
Copyright © 2010 LexisNexis, a division of Reed
Elsevier Inc. All Rights Reserved.
http://www.world-
grain.com/news/news%20home/LexisNexisArticle.asp
x?articleid=1846856917
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