VeraSun Energy

Summary

Lender Advisor

VeraSun was the largest producer of ethanol in the world, owning 16 ethanol production facilities with an aggregate production capacity in excess of 1.6 billion gallons.

Carl Marks Advisors (CMA) was engaged by the Senior Secured Lenders to the US BioEnergy facilities of VeraSun Energy Corporation, which filed for Chapter 11 bankruptcy in October 2008 with over $1.5 billion in debt across multiple tranches.

CMA advised on defensive debtor-in-possession financings, §363 credit bid strategies, asset acquisitions, and post-acquisition financing to maintain operations and facilitate secondary asset sales. They supported the lender group in selling one facility to Valero Energy at auction and executing a successful credit bid for six other facilities, which were resold to five buyers within seven months.

Despite complex market conditions and VeraSun’s intricate capital structure, CMA helped the lender group protect and maximize the value of its collateral throughout the process.

Engagement Highlights

Carl Marks successfully advised the senior lender group on multiple, defensive debtor-in-possession financings, multiple comprehensive§363 credit bid strategies and acquisitions to maximize the value of its collateral, post-acquisition financing and transition services for the lender group to maintain operations throughout the secondary sale processes to third parties, as well as the re-sale of acquired assets to such third parties following emergence from bankruptcy.
CMA advised the lender group on the sale of one of its facilities to Valero Energy Corporation at the bankruptcy auction in March 2009, while simultaneously advising the lender group on its successful credit bid strategy for each of its remaining six facilities. The lender group, with assistance from CMA, subsequently sold these six facilities to five distinct buyers in less than seven months after emerging from bankruptcy.
Aside from the incredibly tumultuous market conditions prevailing throughout the domestic ethanol industry at the time, the complexity of the engagement stems from the nature of the capital structure. The Debtor had numerous credit facilities supporting various collateral pools of ethanol production facilities throughout the country from its prior acquisitions/roll-up strategy. Carl Marks was instrumental in assisting the lender group navigate this extremely complex capital structure, while protecting the value of its own collateral ahead of the auction.

VeraSun Energy

Summary

Lender Advisor

Engagement Highlights

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