On Tuesday Aventine Renewable Energy asked for Chapter 11 bankruptcy protection from the U.S. bankruptcy court in Wilmington, Del. According to the company's filing, it had $799.5 million of assets and $490.7 million of debts at year-end.
The Pekin, Ill.-based ethanol company and six affiliates cited declining liquidity and margins as the reason for asking for protection from creditors. Chief Accounting and Compliance Officer William Brennan said a large investment in auction-rate securities was partially to blame for the decline in liquidity.
Also due to fixed obligations to buy corn and natural gas at above-market prices as well as narrowing spreads between ethanol and corn prices has cause negative gross margins since mid-2008.