Not that long ago, green industries like ethanol producers were on par to make a ton of greenbacks, capitalizing on the needs of a public clamoring for cleaner and less costly alternatives to fossil fuels and rising gasoline prizes. But fast forward to 2011, a time when corn prices have more than doubled while ethanol prices refused to keep pace proportionally with these rises in corn prices.
This economic imbalance became a recipe for disaster for North Carolina’s first-ever ethanol plant, Clean Burn Fuels, causing the company to close in early March and file for Chapter 11 bankruptcy this week. The company, founded in 2005, filed for Chapter 11 according to a company statement “to preserve its assets while creating a plan to emerge from bankruptcy protection in late summer or early fall.” “By that time, the new corn crop will be available, thus providing more clarity regarding the relative levels and stability of corn and ethanol prices," continued the company statement.
According to an article by the Fayetteville Observer, the company is optimistic it can burn its financial burdens in bankruptcy. “Clean Burn Fuels will then be able to better identify how much funding it will need to re-start and exit from Chapter 11 protection, the company said. Current cash reserves will be sufficient to fund operations during the reorganization process, the company said. Doug Archer, general manager, said plant officials hoped to return to production in the next two months. The last time corn prices soared was a little more than two years ago, he said. It lasted roughly seven weeks. Once corn prices drop, he said, there would be a short lag time before the plant returned to production.”
The Clean Burn Fuels bankruptcy is illustrative of how a Chapter 11 filing can help many companies adapt to a changing business landscape following our recent Great Recession. In the wake of the housing crisis, lingering consumer skittishness, drops in tourism and trade, and other economic woes, many industries have faced financial challenges, including those with great promise like ethanol, taking the businesses that serve them right along with it.
If your particular industry has been affected by the economic downturn, as in the case of Clean Burn Fuels, Chapter 11 can buy you the right amount of time to reorganize the way you do business and get back to making better financial decisions. And buying you time to tweak your business model is part of what Chapter 11 is all about: diminishing debt while you save your means for a more profitable future.
Are you personally an active businessman or woman who is considering a new way to rev up your business through the benefits of a Chapter 11 bankruptcy filing? Or are you an average American reading about the benefits of bankruptcy and want to learn how these types of benefits can help you? If you are seeking the broad protections of bankruptcy, it’s best to consult with a qualified attorney before filing. A good bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests throughout the duration of the case, regardless of your status. The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.