Press Release
Mead Ethanol Plant Announces Temporary Shutdown
News Release for Friday, November 30, 2007
Contacts: R.J. Wilson, (913) 209-3936
SHAWNEE, Kan. – E3BioFuels – Mead, LLC (“E3 Mead”) filed a voluntary petition today for reorganization under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in Kansas City, Kansas. The protection of Chapter 11 allows E3 BioFuels Mead to reorganize its business operations and finances. The Chapter 11 filing will allow the Company time to seek additional capital financing necessary to repair the ethanol plant which was materially damaged during startup. E3 Mead began its operations during the ethanol industry’s recent growth period. However, during construction, and in attempting to reach full production, the plant encountered significant construction delays and mechanical/equipment failures which delayed the startup of the Plant.
Continued mechanical/equipment failures prevented the Plant from reaching full production. The deterioration of the ethanol market, coupled with the plant operating at materially less than full capacity, made the economics untenable and the reorganization allowed under Chapter 11 necessary. It is important to note that the science, the process and the patent supporting E3 have all been proven successful.
According to officials at E3 Mead, "Decreased production levels due to mechanical/equipment failures coupled with the high cost of corn and the low price of ethanol made for difficult economics at the plant and have taken a toll on our business. Our current corporate structure cannot absorb the shortfall without a restructuring. As a result, we are seeking the protection and relief provided by Chapter 11, which will allow us to make the necessary mechanical repairs while we stabilize the business and fully explore other funding and business opportunities. This filing is a proactive step for E3 Mead.
We believe the filing is in the best interests of the stakeholders of the Company. It provides the opportunity to restructure our balance sheet, improve our operations and position ourselves for the future to provide a reliable, cost effective and environmentally friendly alternative to foreign oil.”
“The opportunities being pursued will afford E3 Mead the tools to accelerate other components of its current restructuring plan and allow mechanical completion resulting in full production.''