The purchase of Renew Energy by Valero is being challenged. As originally posted, Valero was to purchase the 110 million gallon per year ethanol plant for $72 million. However, ALL Fuels & Energy out of Iowa has filed a motion with the U.S. Bankruptcy Court stating that stated that they were the highest bidder for the plant and they should take ownership.
ALL Fuels & Energy has asked the bankruptcy court to reconsider Valero’s $72 million bid earlier this month when they said they submitted a bid of $77 million. ALL Fuels & Energy explained, “During the auction, at approximately 8:45 p.m., Valero submitted a $72 million cash bid as a ‘conditional’ bid, with an expiration time of 9:15 p.m,” the company explained. “At 9:01 p.m., a $77 million bid by ALL Fuels-Jefferson, LLC was announced, based on a discount formula, as a ‘bid of $72.1 million’. Blair and Bankers’ Bank [the lead creditor for the bankruptcy proceeding] then advised the auction participants that ‘time had run out, the auction closed,’ and announced that the ‘best bid is Valero,’ even though Valero’s bid was $5 million less than the All Fuels- Jefferson, LLC bid,” the company continued. “At 9:06 p.m., the ALL Fuels- Jefferson, LLC attempted to enter a substantially higher bid than its previous $77 million bid. ALL Fuels-Jefferson, LLC was not permitted to enter this bid by Blair and Bankers Bank.”
The court noted recently, “As the background facts of this case demonstrate, confirmation of Valero’s bid over that of ALL Fuels was in error; the auction was tainted by defects, and therefore it is within the court’s discretion to reconsider the Sale Confirmation Order, signed on Dec. 17, 2009…It would be manifestly unfair to ALL Fuels to allow the confirmation of sale to Valero to stand, when the procedures of the auction were so skewed and tainted.”