On behalf of Law Offices of Mark M. Kratter, LLC on December 14, 2012
Connecticut business owners may currently be feeling the pinch of tough economic times. When the financial strain becomes too much, owners may seek the protection that Chapter 7 bankruptcy can offer. Recently a biomass producer, apparently experiencing massive financial strain, did just that.
The company let go of all of its employees, including the CEO, COO and Controller. The bankruptcy was filed Nov. 5, but the company has declined to comment. Big Island Carbon LLC ran out of funding for their project, and the owners chose to file the bankruptcy while also searching for new investors for the venture. They have spent close to $50 million in order to build a biomass plant. Their goal was to turn macadamia nut shells grown in Hawaii into granulated activated carbon.
The original cost of the project was $20 million, but that price shot up to $50 million. In their filing, the company has listed secured claims from several companies. Denham Capital appears to have the most invested in the project, about $45 million in a loan and investment equity. Construction on the biomass is almost complete, but the company needs about $5 million more and funding to begin the startup operations.
The company owes well over half a million dollars in unsecured claims to numerous companies and millions of dollars to its investors and lenders. When a Connecticut company begins to buckle under financial strain, Chapter 7 bankruptcy could help the business confront the problems in a responsible manner. Speaking to someone knowledgeable about a company's financial struggles could help a business make the best bankruptcy decision for its unique situation.
Source: Pacific Business News, "Biomass producer Big Island Carbon files Chapter 7 bankruptcy," Janis L. Magin, Nov. 27, 2012
