By TIM ALEXANDER
Illinois Correspondent

PEORIA, Ill. — A federal bankruptcy judge in Peoria approved the sale of Central Illinois Energy (CIE), a nearly completed $130 million ethanol plant located near Canton in Fulton County, to Credit Suisse, which financed the project with more than $90 million.

Gatehouse Media reported that Credit Suisse provided $5.5 million to pay plant expenses after CIE filed for bankruptcy in December 2007, and will pay another $74.5 million as part of an $80 million buyout. The sale is scheduled to close on April 30.

A bankruptcy attorney has said it will take another $25 million-$30 million to complete the plant, which is expected to boast a capacity of 37 million gallons per year.

Ground was broken on the plant in October 2006 but it was soon besieged by design problems and financial woes. CIE was near completion when lead contractor Lurgi PSI walked off the job in November due to nonpayment. Other contractors followed suit, filing millions of dollars in liens against the company.

All but two of CIE’s board of directors resigned after the liens were filed. The remaining board members made the decision to file bankruptcy after the Illinois Department of Agriculture (IDOA) seized the plant’s grain inventory and company officials surrendered their grain dealer and warehouse licenses to the state on Dec. 19, 2007.

Lurgi PSI opposed the sale to Credit Suisse, which was approved by U.S. Bankruptcy Judge Thomas Perkins, in a written filing. According to an attorney for Credit Suisse, some of the liens filed by contractors have been settled.

A group of 260 farmers who committed cash and grain to the fledgling plant received good news on April 21 when IDOA announced they will receive 100 percent of their claims.

The farmers were owed money by Central Illinois Grain Co., CIE’s grain-handling arm, for grain stored in its elevators. IDOA sold the seized grain to Cargill, Inc. to recover the farmers’ investments.
“Due to the quick action by our warehouse examiners, I’m pleased to say the department was able to secure the company’s assets in order to pay the claimants and make no draw on the Grain Insurance Fund,” said acting IDOA director Tom Jennings in a news release.

Approximately $6 million in checks are being sent to the farmer-investors, based on a rate of $4.035 per bushel, the closing for corn on Dec. 19. Claimants who were delayed in signing for their certified letter disclosing IDOA’s determination are not yet eligible for payment, according to the release.

Some of the farmer-investors are still unsure as to their contract status with the new ownership, fearing they will be forced to deliver grain to CIE’s elevators under terms of their old contract. Credit Suisse’s attorney told media sources that the company is renegotiating grain contracts with farmers.

An employment advertisement recently placed in area newspapers seeks a full-time controller responsible for managing all of the financial and administrative aspects of CIE.