The removal of an Indeck power boiler from the Gateway Ethanol Plant will move the last of the objections to the asset sale close to resolution. Once the objection is resolved the rest of the matters involving the ethanol plant should be easily resolved, said Ted Loomis, chairman of the Gateway Ethanol board of directors.
“I think the bankruptcy court will handle any other items fairly quickly,” Loomis said.
Indeck objected to the asset sale because they wanted a ruling on the validity of the lease of their boiler to the plant. A judge ruled it was a valid lease and Dougherty, the principal lender, rejected the lease so Indeck is removing the boiler.
The plant purchased pair of Victoria Energy boilers on Jan. 22. Those boilers sit covered on the plant site ready for installation once the Indeck boiler is removed.
The removal of the boiler is scheduled to start March 22 and must be complete by April 22, Loomis said.
Two companies, ICM out of Colwich working for Dougherty and LVI from Pennsylvania working for Indeck, will have the responsibility of removing the boiler.
Some piping and various pieces of the plant will have to be removed including a heat exchanger. The boiler will be rolled out of the plant and cranes will load it onto a heavy-duty semi then it will be transferred to a rail car.
The Indeck had the capability to produce all the necessary steam by itself while it will take both Victoria Energy boilers to produce enough steam for the plant. Loomis is anxious for the Indeck boiler to be removed.
“The sooner the better as far as I’m concerned,” Loomis said.
It will take about six months to retrofit the new boilers and get the necessary air permit.
After the boiler is removed Loomis anticipates another hearing among Indeck, Gateway and Dougherty to resolve matters on this last objection to the asset sale. Indeck may possibly assert they have an administrative claim on the bankruptcy and that has to be settled before bankruptcy can be finalized and the asset sold.
When the asset, the plant, is sold it will belong to the financial institutions.
“When the asset sale closes, the title belongs to Dougherty and the participating banks,” Loomis said. “At that time Gateway will have no assets.”
Approximately 40 banks are involved with the plant.
What Dougherty and the participating banks will do with the plant once they get the property is unknown but it will be up to them to decide. Loomis said he thinks they will want to sell the plant.
“I don’t see the participating banks wanting to own an idle ethanol plant,” Loomis said. “I think they will sell it and get some of their money back but I just don’t know those answers.”
They could choose to sell it as is or bring it up to name plate status, an ethanol plant capable of producing 55 million gallons of ethanol a year.
Another hearing may be scheduled on March 24 concerning the handling of the stack on the northwest corner of the plant during the boiler change out.
The $110 million ethanol plant began operating in late November 2007 after weather and other delays in construction. It never reached full operating capacity. It shut down for damage repair following a December 2007 ice storm. It restarted operation briefly with temporary boilers but shut down for good in late February 2008 and has not operated since. Gateway filed for bankruptcy in October 2008 and is still waiting for the last of the objections to the sale of the asset, the plant, to be settled.
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The removal of an Indeck power boiler from the Gateway Ethanol Plant will move the last of the objections to the asset sale close to resolution. Once the objection is resolved the rest of the matters involving the ethanol plant should be easily resolved, said Ted Loomis, chairman of the Gateway Ethanol board of directors.
“I think the bankruptcy court will handle any other items fairly quickly,” Loomis said.
Indeck objected to the asset sale because they wanted a ruling on the validity of the lease of their boiler to the plant. A judge ruled it was a valid lease and Dougherty, the principal lender, rejected the lease so Indeck is removing the boiler.
The plant purchased pair of Victoria Energy boilers on Jan. 22. Those boilers sit covered on the plant site ready for installation once the Indeck boiler is removed.
The removal of the boiler is scheduled to start March 22 and must be complete by April 22, Loomis said.
Two companies, ICM out of Colwich working for Dougherty and LVI from Pennsylvania working for Indeck, will have the responsibility of removing the boiler.
Some piping and various pieces of the plant will have to be removed including a heat exchanger. The boiler will be rolled out of the plant and cranes will load it onto a heavy-duty semi then it will be transferred to a rail car.
The Indeck had the capability to produce all the necessary steam by itself while it will take both Victoria Energy boilers to produce enough steam for the plant. Loomis is anxious for the Indeck boiler to be removed.
“The sooner the better as far as I’m concerned,” Loomis said.
It will take about six months to retrofit the new boilers and get the necessary air permit.
After the boiler is removed Loomis anticipates another hearing among Indeck, Gateway and Dougherty to resolve matters on this last objection to the asset sale. Indeck may possibly assert they have an administrative claim on the bankruptcy and that has to be settled before bankruptcy can be finalized and the asset sold.
When the asset, the plant, is sold it will belong to the financial institutions.
“When the asset sale closes, the title belongs to Dougherty and the participating banks,” Loomis said. “At that time Gateway will have no assets.”
Approximately 40 banks are involved with the plant.
What Dougherty and the participating banks will do with the plant once they get the property is unknown but it will be up to them to decide. Loomis said he thinks they will want to sell the plant.
“I don’t see the participating banks wanting to own an idle ethanol plant,” Loomis said. “I think they will sell it and get some of their money back but I just don’t know those answers.”
They could choose to sell it as is or bring it up to name plate status, an ethanol plant capable of producing 55 million gallons of ethanol a year.
Another hearing may be scheduled on March 24 concerning the handling of the stack on the northwest corner of the plant during the boiler change out.
The $110 million ethanol plant began operating in late November 2007 after weather and other delays in construction. It never reached full operating capacity. It shut down for damage repair following a December 2007 ice storm. It restarted operation briefly with temporary boilers but shut down for good in late February 2008 and has not operated since. Gateway filed for bankruptcy in October 2008 and is still waiting for the last of the objections to the sale of the asset, the plant, to be settled.
