Pacific Ethanol's four plants seek bankruptcy protection

Sacramento's Pacific Ethanol Inc. has landed in bankruptcy court, its dreams of a West Coast ethanol empire crushed by low fuel prices and high corn costs.

The company placed its four production plants including facilities in Stockton and Madera, in Chapter 11 bankruptcy protection. The company itself didn't file for bankruptcy, nor did its marketing company. But the plants had defaulted on about $250 million in debt, and the company has been frantically seeking new cash for the past several weeks.

Last week Pacific Ethanol reported a 50 percent decline in revenue, a $23.9 million quarterly loss and issued a fresh bankruptcy warning. The filing "really isn't a surprise," said Rick Kment, a commodities analyst at the DTN commodities news service in Omaha.

The ethanol boom has essentially crashed, even as government-mandated ethanol demand continues rising. Ethanol makers have been squeezed between weak fuel prices and the high price of corn, the main ingredient. With prices at about $1.70 a gallon, Kment said ethanol makers are facing a 30 cents-a-gallon loss.

Pacific Ethanol is the third ethanol maker to file for bankruptcy in recent months.

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