VeraSun Meets With Farmers

Sale of seven plants is next step for bankrupt energy firm.

Published on: Jan 30, 2009

Farmers from several states met with top VeraSun officials Wednesday at the Livestock Exchange Building in Omaha, Neb.

Media were barred from attending. Afterwards, farmers and officials described the closed-door session as "cordial" and "civil".

James Bonsall, Jr., senior vice president and chief restructuring officer with VeraSun Energy told reporters one issue now resolved concerns checks VeraSun wrote to farmers who delivered corn to VeraSun plants in the weeks before the Oct. 31 bankruptcy filing. Many farmers didn't cash the checks issued by the company. They were told cashing the checks meant agreeing to deliver corn on any additional contracts at the current market price,

Bonsall said farmers can now cash those checks with no trings attached.

Bonsall said plans are going forward to auction off seven VeraSun plants in March. The sale includes two Nebraska plants, Ord and Central City, plus Albert City and Dyersville, IA, Woodbury, MI, Hankinson, N.D., and Janesville, MN. It is in the best interest of corn growers and those communities to get those plants going again as soon as possible.

Curt Friesen, a corn grower from Henderson, NE., said after the meeting, "Ethanol is still a viable fuel. And there's still a huge supply of corn. It is in the best interests of all to see these plants going again."

One continued frustration, said Friesen, is that farmers have still not been released from future contracts with the bankrupt company. And the company has been reluctant to release farmers from their binding contracts until shortly before the delivery date.

"It's possible that the new buyer will cherry-pick among the contracts," Friesen said, speculatively

Bonsall said the sale of some plants and restructuring may allow VeraSun to continue, albeit on a smaller scale, rather than seek Chapter 7 bankruptcy liquidation.

"It's in the nation's best interests," he says. As oil prices rise and the world works its way out of serious recession, ethanol production could enjoy renewed profitability.