Investors File Bankruptcy Petition Against Maker Of Alternative Fuels
Saturday, July 14th 2007, 8:49 pm
By: News On 6
DALLAS (AP) _ A biodiesel-fuel producer says it will continue operating, despite a bankruptcy filing by a group of investors that claim the company hasn't been paying its debts on time.
Five investment groups _ Castlerigg Master Investments Ltd., Radcliffe SPC Ltd., Portside Growth and Opportunity Fund, Cornell Capital Partners LP and Evolution Master Fund Ltd. _ filed an involuntary Chapter 7 bankruptcy petition against Dallas-based Earth Biofuels on Wednesday in the U.S. Bankruptcy Court in Wilmington, Del.
The investment group said it collectively holds at least $33 million of the company's senior convertible notes, issued last summer.
Earth Biofuels produces, distributes and markets biodiesel fuel, which is made for vehicles from natural seed and animal oils and liquefied natural gas.
In its annual report filed with the Securities and Exchange Commission on May 18, the company listed more than $60 million in losses for 2006. An auditing firm warned that Earth Biofuels' debt and losses raised concerns about how much longer it could operate.
In a statement Friday, the company called the creditors' action unnecessary and said it will continue producing.
Earth Biofuels has a license from country music star Willie Nelson to sell a biofuel called BioWillie. Nelson once served on Earth Biofuels' board but stepped down April 20.