Web Exclusive: VeraSun Files for Chapter 11

VeraSun Energy Files Chapter 11 Bankruptcy
By R. Brown, Web Exclusive Posted Nov. 03, 2008
Ethanol producer, VeraSun Energy Corp. (NYSE: VSE), recently featured in our web exclusive, “Corn Prices Strike the Ethanol Industry from Both Sides,” filed a petition for relief under chapter 11 of the U.S. Bankruptcy code Friday.

VeraSun Energy and its 24 subsidiaries filed for chapter 11 in order to get a handle on its liquidity during reorganization. VeraSun, in its press release, assured employees, customers, and suppliers that business will continue as usual, saying “The Company expects that it will not scale back its purchases of raw materials, and corn and other suppliers will continue to be paid in full for all goods and services furnished after the filing date as required by the Bankruptcy Code. The Company has also sought authority from the bankruptcy court to pay for goods delivered to the Company on or after October 11, 2008.”

VeraSun’s financial woes was precipitated by a dismal third quarter, in large part, due to high corn prices and hedging arrangements.

Don Endres, CEO of VeraSun said, “Today’s filing allows VeraSun to address its short-term liquidity constraints as we navigate historically challenging market conditions while we focus on restructuring to address the company’s long-term future.”

For more on VeraSun Energy, visit their website: www.verasun.com