olddawggreen
07-16-2007, 08:16 AM
Investors file bankruptcy against BioWillie maker
DALLAS — A biodiesel-fuel producer says it will continue operating, despite a bankruptcy filing by a group of investors who claim the company hasn't been paying its debts on time.
Five investment groups — Castlerigg Master Investments Ltd., Radcliffe SPC Ltd., Portside Growth and Opportunity Fund, Cornell Capital Partners LP and Evolution Master Fund Ltd. — filed an involuntary Chapter 7 bankruptcy petition against Dallas-based Earth Biofuels on Wednesday in the U.S. Bankruptcy Court in Wilmington, Del.
The investment group said it collectively holds at least $33 million of the company's senior convertible notes, issued July 24, 2006.
Earth Biofuels produces, distributes and markets biodiesel fuel, which is made from natural seed and animal oils and liquefied natural gas for vehicles.
In its annual report filed with the Securities and Exchange Commission on May 18, the company listed over $60 million in losses for 2006. An auditing firm warned that Earth Biofuels' debt and losses raised concerns about how much longer it could operate.
In a statement released Friday, the company called the creditors' action "unnecessary" and said it will continue producing biodiesel.
Earth Biofuels has a license from country music star Willie Nelson to sell BioWillie, a biofuel made from natural seed and animal oils. Nelson once served on Earth Biofuels' board, but stepped down April 20.
The company operates a biodiesel production plant in Durant, Okla., that produces biodiesel from soy and cottonseed oils, and last year invested in an Illinois biodiesel plant whose partners include Bunge North America, a big agribusiness that operates a soybean facility nearby.
Mike Miles, of Miles Automotive in north Fort Worth, said he bought BioWillie for about two years for his service station and developed a loyal following. But two months ago, he said, the state comptroller's office contacted him seeking to seize inventories of BioWillie because Earth Biofuels owed tax payments.
Miles said the state dropped its efforts after he explained that he was only a retailer, not a distributor. But the experience, along with other misgivings he had developed about the company, led him to switch suppliers.
"It's a shame," Miles said of Earth Biofuels' woes. "I really believe in the product and the ideals."
DALLAS — A biodiesel-fuel producer says it will continue operating, despite a bankruptcy filing by a group of investors who claim the company hasn't been paying its debts on time.
Five investment groups — Castlerigg Master Investments Ltd., Radcliffe SPC Ltd., Portside Growth and Opportunity Fund, Cornell Capital Partners LP and Evolution Master Fund Ltd. — filed an involuntary Chapter 7 bankruptcy petition against Dallas-based Earth Biofuels on Wednesday in the U.S. Bankruptcy Court in Wilmington, Del.
The investment group said it collectively holds at least $33 million of the company's senior convertible notes, issued July 24, 2006.
Earth Biofuels produces, distributes and markets biodiesel fuel, which is made from natural seed and animal oils and liquefied natural gas for vehicles.
In its annual report filed with the Securities and Exchange Commission on May 18, the company listed over $60 million in losses for 2006. An auditing firm warned that Earth Biofuels' debt and losses raised concerns about how much longer it could operate.
In a statement released Friday, the company called the creditors' action "unnecessary" and said it will continue producing biodiesel.
Earth Biofuels has a license from country music star Willie Nelson to sell BioWillie, a biofuel made from natural seed and animal oils. Nelson once served on Earth Biofuels' board, but stepped down April 20.
The company operates a biodiesel production plant in Durant, Okla., that produces biodiesel from soy and cottonseed oils, and last year invested in an Illinois biodiesel plant whose partners include Bunge North America, a big agribusiness that operates a soybean facility nearby.
Mike Miles, of Miles Automotive in north Fort Worth, said he bought BioWillie for about two years for his service station and developed a loyal following. But two months ago, he said, the state comptroller's office contacted him seeking to seize inventories of BioWillie because Earth Biofuels owed tax payments.
Miles said the state dropped its efforts after he explained that he was only a retailer, not a distributor. But the experience, along with other misgivings he had developed about the company, led him to switch suppliers.
"It's a shame," Miles said of Earth Biofuels' woes. "I really believe in the product and the ideals."