Biodiesel "Manufacturer of the Year" Files Bankruptcy
Posted in the Erie Forum
#1 Aug 24, 2012
Biodiesel company files for bankruptcy
By LAURA KINSLER | The Tampa Tribune
Published: August 16, 2012
DADE CITY --
Five years ago, Agri-Source Fuels was pioneering Florida's emerging biodiesel industry. This week, the company that was recognized as Pasco's "Manufacturer of the Year" filed for Chapter 11 reorganization.
"We're doing this to save the jobs and to save the assets," company President Rodney Sutton said. "It's not a liquidation it's a reorganization."
Agri-Source, which leases 60,000 square feet at the Dade City Business Center, stopped paying rent in May and was on the verge of being evicted. But Business Center owner Jim Guedry agreed to renegotiate the lease as part of the reorganization plan.
The company owes its vendors more than $4 million, and it owes Pasco County $198,000 in back taxes.
"We have the support of our landlord," Sutton said. "And most of our vendors are very excited that we are going through Chapter 11 instead of liquidating because it means they'll get paid."
John Hagan, president of the Pasco Economic Development Council, said he's glad the company is trying to work out its issues. "In the long run, I think we all know that fuel prices will continue to go up," he said. "The alternative fuel market is still in its infancy. There will be a push to keep these industries in place."
The Pensacola-based company was founded in December 2006. Agri-Source was attracted to Dade City when one of its managers discovered the former Lykes-Pasco juice plant, complete with nearly 60 giant stainless-steel tanks at the industrial center. Agri-Source invested millions to refit the tanks for its own purposes to convert plant material and chicken fat into oils that then can be shipped to fuel distributors that blend and sell biodiesel. The state of Florida chipped in with a $2.5 million grant.
"Florida is the third largest diesel consumer market in the nation," Sutton said. "The market is vastly underserved."
Agri-Source has the capacity to manufacture 12 million gallons of biodiesel a year, but because of liquidity issues the company halted production three years ago. "We invested in the infrastructure, but we've not been able to use it," Sutton said.
Instead, it concentrated on refining crude glycerin, a byproduct of biodiesel production, into a product that can be used in paints, epoxy resins and plastics among other things. Agri-Source was buying crude glycerin, refining it and reselling it.
"I thought that was an interesting strategy at the time," Hagan said. "I think it's a clever way to do it."
The company generated $1.3 million in revenues so far this year and has assets valued at $13 million. It has never turned a profit, and it was shut down for six weeks.
Sutton said a Lakeland-based alternative fuel company has offered to buy the company's assets and run it as a glycerin refiner. Under that plan, all employees would retain their jobs, and the company would be set up to resume biodiesel production in the future.
The bankruptcy process allows Agri-Source to look for a higher bidder. The goal, attorney Edward Peterson said, is to try to get the most lucrative deal possible for the sale of the company's assets.
"The court will have to approve the bid process as part of the reorganization plan," Peterson said. "We'll be advertising in trade journals once the bid process is approved."
He said the issue of the back taxes would be addressed "when we present our plan to the court."
#2 Aug 24, 2012
This is what happens when gov gets involved.
#4 Aug 25, 2012
Another Enviro-nut scheme bites the dust. While they did receive State & local money & tax incentives.....they apparently folded before the Obama Express could dump a hundred million or so into this rat hole .
I suppose we should count our blessings on this one.
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