Major Ethanol Producer Files for Bankruptcy
WILMINGTON, DE --- VeraSun Energy Corp., the second-largest ethanol producer in the United States, has filed for bankruptcy protection, the L.A. Times reported.
The petition for Chapter 11 bankruptcy was filed in Wilmington and listed assets and debts of more than $1 billion.
Based in Sioux Falls, S.D., VeraSun was formed in 2001 and operates 16 production facilities in eight states. The company boasts an annual capacity of about 1.64 billion gallons of ethanol, according to the company website.
The company's shares on the stock market have fallen 89 percent since Sept. 16, the L.A. Times reported. On Sept. 15, the company had indicated it might report a third-quarter net loss of as much as $103 million because of failed hedging bets. A hedge is a financial instrument used to lock in commodity costs. The company said it locked in corn costs as the price reached almost $8 a bushel after floods posed a threat to crops in the Midwest. But by late October, the price of corn had dropped to $3.64 a bushel -- a 21-month low.
Other biofuel producers that have filed for bankruptcy protection include Greater Ohio Ethanol and Gateway Ethanol, the Times reported.