Indiana Biodiesel Company Files for Bankruptcy

Earlier this month, E-biofuels LLC filed for Chapter 7 liquidation bankruptcy. The company is located in Middleton, east of Anderson, and is owned by Imperial Petroleum Inc., based in Evansville.

In its bankruptcy filing, the biodiesel producer cited over $17 million in debts and listed $11.4 million in assets, including property and equipment. The company has almost $12 million in secured liabilities, which includes $7.4 million in loans from First Merchants Bank located on Muncie.

E-biofuels started producing biodiesel in 2007. Biodiesel can be used as diesel fuel in vehicles. It is manufactured from substances such as vegetable oils, restaurant grease and animal fats. According to the Indiana Department of Agriculture, the company had the ability to make 10 million gallons of biodiesel every year.

As the result of a lawsuit by Vinmar Overseas Ltd., E-biofuels was ordered to pay over $930,000 for failing to supply 500,000 gallons of biodiesel. According to the bankruptcy filing, the judgment was paid off by E-biofuels in 2011.

Companies facing financial trouble, such as E-biofuels, have a number of options available to them. These include filing for Chapter 11 reorganization or liquidation. In a Chapter 11 reorganization, a business has the opportunity to develop a manageable repayment plan while still continuing operations.

If companies are unable to complete a successful reorganization, liquidation is an option. Debtors may choose to convert to a Chapter 11 liquidation plan or a Chapter 7 liquidation bankruptcy. An experienced business bankruptcy attorney can provide guidance regarding the best course of action based on a business' unique needs and goals.

Source: IBJ.com, Central Indiana biodiesel producer files for bankruptcy, Scott Olson, 11 April 2012