Abengoa Faces Involuntary Chapter 7 Bankruptcy Petition Due to $10M Debt

by San Antonio Attorney

Abengoa Bioenergy is being sued by a group of sellers through an involuntary Chapter 7 bankruptcy petition filed with a U.S. Bankruptcy Court in Kansas.

There has been turmoil due to the creditors of Abengoa attempting to recover millions of dollars because of unpaid deliveries of corn in Nebraska, prior to selling its ethanol assets as part of a restructuring plan involving $8 billion worth of debt.

The liquidation or in involuntary Chapter 7 was filed in Kansas and Nebraska because of more than $10 million in grain purchases that were not paid to multiple grain companies before the main company will sell these plants worldwide.

According to the recent petition filed in the Kansas Bankruptcy Court last Thursday, a group of creditors such as two Nebraska grain cooperatives have secured huge money amounting to $33 million in financing last April 2015.  The primary concern is how the money will be rechanneled to the parent company before the owed companies will finally get paid.

The new petition will be filed by Gavilon Grain, a company based in Omaha.  They have filed a similar petition in Nebraska.  Farmers Cooperative in Dorchester and Central Valley Ag Cooperative in York will also file the same case.  The three companies are owed approximately $3.2 million total for grain delivered to the Abengoa plant.  They claim not being back since August of last year, according to court documents.

These creditors have also filed a petition to limit Abengoa’s liberty in selling their assets, obtaining new loans and appointing an interim trustee.  In bankruptcy cases,the interim trustees are elected to make an organization on how assets should be divided among creditors.  This was part of court proceedings in Nebraska.

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