The BrownWinick Law Firm has assisted Pine Lake Corn Processors, a Steamboat Rock, Iowa ethanol plant with the handling of its Chapter 11 bankruptcy reorganization. Originally filed on December 4, 2008, in the bankruptcy court for the Northern District of Iowa, the ethanol plant was rewarded on the one-year anniversary of the filing of bankruptcy, December 4, 2009, with an order confirming the Plan of Reorganization. The ethanol plant had originally filed for Chapter 11 after suffering losses due to rapidly changing corn and ethanol prices and losing its operating line of credit. At the time of the bankruptcy filing, the ethanol plant had been idled for a short period of time, however the plant restarted production in late December after the attorneys and the client worked out arrangements with the senior lenders and ethanol marketing firm. The effective date for the Plan will be December 23, 2009.
Subsequent negotiations with its senior lenders, its largest unsecured creditor and its marketing company allowed Pine Lake to put together a Plan of Reorganization that was overwhelmingly supported by the creditors when put to a vote in November of 2009. As part of that Plan, Prairie Land Cooperative agreed to take equity in lieu of a payment of its administrative claim and rejection damage claim which totaled more than $14 million dollars. Prairie Land Cooperative will own approximately 85% of the company. In addition, the secured banks agreed to a restructuring of their lines of credit which totaled approximately $14.5 million dollars.
The reorganized company will continue to operate as Pine Lake Corn Processors, LP. The plant employs more than thirty people and uses about 12 million bushels of corn to produce about 30 million gallons of ethanol per year. The current management and employees will remain in place.
It is unusual for any company in Chapter 11 to successfully emerge with a confirmed plan and without a sale of the assets.
— James L. Pray
James Pray was co-counsel in this case, In Re: PLCP, L.P., Case No. 08-02680, The United States Bankrupcty Court for the Northern District of Iowa.