WILMINGTON, Del. (CN) – VeraSun BioDiesel is the fourth bioenergy firm to file for bankruptcy since September, listing more than $1 billion in debts. The once highly touted company got into trouble by locking itself into long-term corn contracts before commodity prices dropped; then oil prices plummeted, the credit crisis hit, and VeraSun could neither borrow nor find a buyer.
Financial publications expect VeraSun, a publicly traded company, to be forced to sell itself on unfavorable terms. Also filing for bankruptcy were 11 VeraSun subsidiaries.
The worldwide financial crisis, combined with dropping oil prices, portend hard times for the biofuel industry.
Other ethanol and biofuel companies that have declared bankruptcy since September include Greater Ohio Ethanol, Gateway Ethanol, and Beatrice Biodiesel. Bioenergy of America filed for bankruptcy in February.
VeraSun owes its chief creditor, Well Fargo Bank, $447.7 million.