It remains to be seen if the New Energy Ethanol Plant in South Bend has any gas left in the tank.
The plant shut down last fall when the owners filed for bankruptcy, and there’s no guarantee that it will ever re-open.
In fact, a joint venture between two liquidation firms submitted the apparent high bid as the plant was sold at auction on January 31st.
Tomorrow the case heads back to bankruptcy court, where a Texas based firm called Natural Chem is trying to block the sale.
In its latest court filing, Natural Chem seeks to have the case moved out of the bankruptcy court and into the district court where it can pursue a jury trial to settle its claim that the first auction was marred by fatal legal flaws.
Late today, a judgement was issued denying Natural Chem's latest requests.
Meantime, from the city’s perspective, if the joint venture of liquidation firms did end up owning the plant, it wouldn’t be the end of the world.
“We remain cautiously optimistic that an operator will be in place at the plant in the future,” said Scott Ford, Director of Community Investment for the City of South Bend. “Right now, the building is essentially for sale again by the new owners and we continue to field calls from potential, potential interests to see how the city may be able to help incentivize or partnership those operations.”
Ford said that the auction was scheduled too quickly to give some interested parties enough time to do their due diligence. “I would say at different levels of formalities we’ve received calls from numerous interests, some of whom are involved at the actually auction itself, others who have come on line since then.”
A brief filed by the U.S. Department of energy contains no optimism about efforts to find a new plant operator.
The DOE document notes that before the bankruptcy, a year and a half was spent trying to sell the plant, and that “NEC’s financial advisors contacted up to seventy parties to discuss possible sale transactions, but did not succeed in closing a sale.”
The DOE brief also notes that prior to the January 31st auction, “NEC’s (New Energy Corporation) financial advisors contacted over a hundred parties to solicit their participation,” but that only “five of those parties participated in the auction.”
The U.S. Department of Energy is owed more than $33.3 million by the current plant owner, while the high bid at the auction was a mere $2.5 million.