Fair / -2° F
Ethanol plant faces foreclosure
Published 7:35am Tuesday, September 22, 2009Foreclosure proceedings have commenced against the Otter Tail Ag Enterprises ethanol plant in Fergus Falls.
But financial problems are not giving way to plans to close the plant or lay off employees, according to company officials.
AgStar Financial Services and MMCDC New Markets Fund (NMF) on Sept. 12 filed a complaint against Otter Tail Ag Enterprises, Otter Tail County and U.S. Bank National Association in Otter Tail County District Court. The complaint initiated foreclosure proceedings against the ethanol plant.
AgStar Financial and NMF are requesting the collection of assets and the selling, transfer or otherwise disposing of any and all property and assets of Otter Tail Ag Enterprises, according to the complaint.
The Fergus Falls ethanol plant is “fighting hard” to continue operating, CEO Anthony Hicks said. Otter Tail Ag Enterprises is the only ethanol plant still in operation in the area while others have shut down, most recently the ethanol plant in Casselton, N.D., last week, Hicks said.
“Despite the woes, the efforts are still rewarding,” Hicks said, adding that it continues to contribute to the community and no layoffs are expected. Corn continues to come in and ethanol continues to go out daily, Hicks said.
Hicks had no comment on the filing.
As of July 31, Otter Tail Ag Enterprises owed a total of $42 million to AgStar Financial and $19.7 million to NMF, the complaint states.
After Otter Tail Ag Enterprises failed to make monthly installments that were due Feb. 1 and March 1, the company entered into a forbearance agreement until April 30, which means AgStar Financial agreed to forgo its right to foreclose. However, Otter Tail Ag Enterprises also failed to make the required monthly payments due April 1, May 1, June 1, July 1 and Aug. 1, according to the complaint.
As a result, Otter Tail Ag Enterprises was given notice July 27 that the full amount was due.
