Ethanol plant sale approved, no solution to flooding problems

South Bend's ethanol plant has some new owners, but many residents who live nearby are unhappy with the sale.

On Tuesday, a judge approved the sale of the New Energy ethanol plant to two resale companies, Maynards and BidItUp.

Last week in an auction, the companies teamed up and bid $2.5 million for the plant, which closed in November amid financial troubles.

But, as New Energy lawyers prepared to ask the court for sale approval, an objection to the sale was filed.

One of the other bidders, Natural Chem, argued the sale violated bankruptcy law.

According to Natural Chem CEO and President Robert Salazar, companies are only allowed to bid together in a bankruptcy sale if it's approved before the auction.

Salazar says Maynards and BidItUp didn't get approval and decided to enter a joint bid in the middle of the auction.

So, Natural Chem asked the court to rule the original auction void and require a new auction sale to take place.

But, after a long day in court, the judge ruled the proceedings were transparent because the joint bid was announced to all participants, so the sale of New Energy was approved.

"In our opinion, an operator would have won the auction," Salazar said. "However, they were outbid by this joint venture of two liquidation groups that were allowed to bid together."

It's likely the new owners of New Energy will sell all of the plant's assets, which could create a roadblock for residents living nearby.

When the plant was operational, it pumped more than 6 million gallons of water out of the ground everyday.

Since the company shut down, the groundwater level has continued to rise, causing flooding and mold in many nearby homes.

"We've had a lot of water issues," said Peggy Tomkiewicz, who lives down the street from New Energy. "Our sump pumps run every five minutes, if we go that long. We've replaced two pumps since this started."

South Bend leaders have held several public hearings to try and come up with a solution to residents' water woes, but so far haven't taken any action.

It seems the most simple solution would be to turn the pumps at the plant back on, but that likely won't happen since liquidation companies bought the facility.

"That makes me angry," Tomkiewicz said. "I was under the assumption another company would come in and start those pumps."

There were several companies at the auction last week who planned on operating the closed down plant, including Natural Chem.

"We had said the minute we're selected, we'll pay the money to turn on the water pumps to stop the flooding in the community," Salazar said.

But, Salazar says Natural Chem won't appeal the bankruptcy judge's ruling, so the sale of New Energy will likely stand.

That means city leaders and residents still don't have a solution to the neighborhood's water problems.

There will be another public meeting to discuss the issues at Rum Village Nature Center on Thursday at 5:30 p.m.


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