They called it Genesis, in the beginning, and it was to be the start of something unique and groundbreaking in the energy industry.
The idea was to convert manure from a feedlot of about 30,000 cattle near Mead into methane and to use the gas as the energy for making 20 million gallons of ethanol per year from corn.
The cattle, in turn, could eat the wet distiller's grain, a leftover byproduct.
But in fact, Genesis never achieved commercially viable operation, according to court documents filed since its owner, E3 Biofuels, filed for Chapter 11 bankruptcy in November 2007.
The Genesis plant's enthusiastic visitors on its ceremonial opening day in June of 2007 ranged from Republican Nebraska Gov. Dave Heineman to a representative of the Natural Resources Defense Council, all hailing a new and home-grown energy-producing system.
More than three years later, ownership of the star-crossed plant in Mead is about to change.
The $80 million investment was knocked out of action by a boiler explosion in February 2007 and subsequent failures to repair it, according to bankruptcy documents.
The ripple effects went beyond 41 jobs lost. Alvo Feed and Grain, for example, closed by state regulators in April of 2008, was one of its biggest creditors.
Everybody interested in the Genesis plant has been awaiting closing on a sale agreement filed in bankruptcy court 10 months ago, while a variety of maddening legal and tax details were resolved.
The pioneering plant is expected to be fired up again, but those who might know when aren't talking.
The buyer is AltEn LLC, a a Kansas company created by real estate businessman and lawyer Scott Asner, who divides his time between Kansas City, Mo., and Florida.
AltEn's attorney, Robert Herman, would not comment. E3 Chairman Dennis Langley could not be reached.
But Chapter 11 trustee Rob Carringer, a Dallas bankruptcy specialist overseeing the complicated E3 Biofuels case in Wichita's federal bankruptcy court, said he expects the purchase of the company to close within weeks.
"We are hopeful this sale will close by mid-November," Carringer said. "We're working on final closing documents as we speak, and those are circulating among the seller, me, representing the company, the buyer, AltEn, and other parties, the unsecured creditors committee, Saunders County, secured lenders and the bond holders."
"The deal is essentially done," he said. "From what I understand, the buyers intend to restart the plant with the original mission intact, a closed-loop system to make methane to run an alcohol still," Carringer said.
It's not clear how much it is costing the new owner to bring the $80 million plant back to life. Terms could not be detected in bankruptcy documents. Nor is it clear how much the owner and those who bought the bonds to finance the project are losing in the bankruptcy.
Carringer explained the buyer is assuming the debt to bondholders who financed the original deal. That amount hasn't been made public in bankruptcy documents and isn't likely to emerge, Carringer said.
Wells Fargo is the indentured trustee for Oppenheimer and CIT, big financial firms that invested in the bonds.
Carringer's goal since 2008 has been to get the company sold.
That's about when credit markets evaporated in the big recession, and money for ethanol plants disappeared.
"I was sitting with this plant waiting for credit markets to improve," Carringer said. "Then last year, VeraSun (ethanol) plants sold, (also out of bankruptcy.) That staggered the ethanol community for awhile. Those were pretty scary numbers."
He meant scary low.
"We actually did run an auction process and had court approval to sell," he said. "The sale order was approved, but the sale didn't consummate, because of a number of issues, problems with things like the bonds and taxes owed. Nebraska has some unusual laws on past-due taxes.
"Those have been worked out ... and that clears the way for the sale to be consummated. There's not another court hearing on the docket," Carringer said.
Among other details that have been unsettled for almost a year is a little matter of property taxes.
Property taxes due on the property amount to more than half a million dollars a year since 2007, according to the Saunders County website. It shows the land worth $2.45 million, and improvements worth $24.2 million. E3 also owns another 193 acres of undeveloped land in the county.
Genesis was a tax-increment financing project of the Village of Mead, which annexed the site, so most of the property taxes on the improved property were supposed to pay off the bonds issued to finance a part of the project.
A draft stipulation prepared for the bankruptcy court shows E3 disputed the property tax bills for 2006 through 2009. To settle the dispute so the plant could be sold, all the parties agreed to settle the tax bills through 2010 for $750,000, $375,000 from AltEn, and $375,000 from the trustee of industrial revenue bonds issued to finance the project.
Saunders County is supposed to retain almost $99,000 on behalf of the village, and the rest is supposed to go to the TIF bondholders, according to the document.
It also says the parties recognize and accept that the future actual fair market value of the property and subsequent property taxes may be "materially less" than those originally set forth in the TIF documents.
The stipulation was necessary to get the buyer, AltEn, to close the deal, the document says.
The circumstances made the plant "a challenging asset to sell," as Carringer put it, but it's close to being wrapped up.
"That's good for the community and the lenders," Carringer said.
Reach Richard Piersol at 402-473-7241 or at email@example.com