GO Ethanol to sell for $5.75M pending court approval

LIMA - Greater Ohio Ethanol has reached an agreement to sell the now-bankrupt plant for a fraction of the $150 million it cost to build the Perry Township facility.

According to documents filed Monday with the U.S. Bankruptcy Court, GO Ethanol has agreed to sell the plant to Paladin Ethanol Acquisition for $5.75 million. Paladin Capital Group, based in Washington, D.C., provided equity for the plant's construction.

Despite the agreement, the sale still must be approved by the bankruptcy court. GO Ethanol has a hearing Wednesday morning in Toledo before the U.S. Bankruptcy Court's Northern District of Ohio.

Since mid-December, three sale deadlines set by the court have come and gone without a sale. GO Ethanol had accepted a stalking-horse bid, or a bid to establish the auction's minimum bid, from Michigan-based NextGen Ethanol. But NextGen failed to pay the required deposit, setting the process back.

Paladin and NextGen were the only companies to submit bids.

The plant began production in July. By October, GO Ethanol owner Greg Kruger had filed for Chapter 11 bankruptcy, and the plant was closed by December.

The plant was expected to sell for considerably less than what it cost to build, and likely less what was owed to investors. GO Ethanol attorney Tim Hurley previously said the plant could sell for as low as $18 million.

Hurley was unavailable for comment Monday.