The ethanol company out of Basehor, Kansas had at one time announced their plans to build three plants, but had ceased such actions and also put an end to an agreement in which they were to buy a small plant located in Nebraska. The company also let go three of their six officials, according to a filing made with the Securities and Exchange Commission (SEC). The officials that are still with the company are CEO Albert Knapp, Lisa Hallier, and CFO David McKittrick. The officials that were dismissed are co-chief operating officers Bryan Sherbacow and Randall Rahm and executive chairman Robert Walther.
Ethanex outlined its financial problems and discussed bankruptcy as a possibility on March 12, 2008. The company had made plans that involved building three plants. Each new plant would have been able to produce 110 million gallons of ethanol annually. Organizers had raised $20 million in a 2006 private stock offering and then made the shares available for public trading.
In January 2008, the company held a reverse stock split in which shareholders were reduced to 1 share for every 10 shares that they owned. In October, shares were trading as high as $48 per share, but as of March 24, 2008 shares had dropped 9.1 cents in OTC markets to 17 cents per share.
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The acquisition of the Nebraska plant involved a $50 million purchase, which would then be followed by two more transactions as Ethanex would expand the plant. The total amount for the acquisition and the expansion would total $170 million in cash and enough in shares to make the transaction amount total $220 million. Unfortunately, that deal would also involve Ethanex having to raise $1.5 million in interim financing while it worked to find the monies for the deal, which it failed to do.
In addition to this bankruptcy news, Ethanex is also on the complaining end of an SEC complaint that says they are the victim of an alleged scam in which one of their attorneys illegally sold unregistered shares to the public.
By Ginger Gillenwater