Pacific Ethanol, Inc. announced today that its has filed for Chapter 11 of the U.S Bankruptcy Code. Pacific Ethanol is just one of many ethanol plants that have filed bankruptcy protection over the past 12 months. The Company and its marketing subsidiaries, Kinergy Marketing LLC (“Kinergy”) and Pacific Ag. Products, LLC (“PAP”), have not filed for Chapter 11 bankruptcy protection.
Pacific Ethanol is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries’ ethanol and feed production under existing Marketing Agreements. Pacific has reached a financing agreement with WestLB AG that will allow them to meet customer needs, but the financing deal still needs approval from the bankruptcy court.
In a company statement today, Neil Koehler, Pacific Ethanol’s CEO and President said, “We have worked well with our creditors to develop a plan that we believe allows us to continue operations and meet our commitments to our customers and vendors. We are unwavering in our vision of being a leading producer and marketer of low carbon fuels in the Western United States. While the market environment for the ethanol industry has been challenging over the last several quarters, we remain confident that a restructured company will grow and prosper as the demand for low carbon fuels increases.”
Pacific Ethanol’s Chairman of the Board, Bill Jones, added, “We appreciate the support of West LB, Wachovia and the work of our management team. Our objective is to move this process forward as quickly as possible so that we can maintain our focus on serving our fuel and feed markets.”