Pacific Ethanol Files for Bankruptcy and Seeks DIP Financing From Its Prepetition Lenders
Introduction
On May 17, 2009 (the "Petition Date"), Pacific Ethanol filed for bankruptcy in the United States Bankruptcy Court of the District of Delaware. According to Pacific Ethanol's Declaration in Support of First Day Pleadings (the "Declaration"), the company owns and operates four ethanol plants with combined production capacity of 200 million gallons of ethanol per year. Two of the company's plants are located in California (Stockton and Madera), one in Burley, Idaho and one in Boardman, Oregon. As stated in the Declaration, only the Oregon facility is operating as of the Petition Date.
Each of the company's four facilities operate as a separate LLC. All four, however, are parties to a marketing agreement with Kinergy Marketing LLC, granting Kinergy the exclusive right to buy and sell each plant's ethanol. Each of the four Pacific Ethanol facilities buy their corn used in ethanol production from Pacific Ag. Products, LLC.
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