Pushed by Credit Crunch, Ethanol Producer Declares Bankruptcy

Environment News Service

WILMINGTON, Delaware, November 3, 2008 (ENS) - One of the nation's largest ethanol producers has filed for bankruptcy, but its creditors and the bankruptcy judge are allowing the company to stay in business while it reorganizes.

VeraSun Energy Corporation of Sioux Falls, South Dakota, and 24 of its subsidiaries filed for relief under chapter 11 of the U.S. Bankruptcy Code in a Delaware bankruptcy court "to enhance liquidity" while they reorganize.

"Today's filing allows VeraSun to address its short-term liquidity constraints as we navigate historically challenging market conditions while we focus on restructuring to address the company's long-term future," Don Endres CEO said immediately after the filing on Friday. "We appreciate the loyalty of our employees, customers and suppliers during this challenging time."
In the third quarter of this year, the company was hit with a sharp spike in its corn costs, "reflecting in part costs attributable to its corn procurement and hedging arrangements, and historically unfavorable margins," explained Endres.

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