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Monday, Pacific Ethanol, Inc. filed for Chapter 11 bankruptcy. The Burley plant has been closed since January. The company had consistently insisted that it's a temporary shutdown and that the plant will reopen when market conditions improve, rehiring the 24 people it laid off at the beginning of the year.
That's still the plan. Paul Koehler, company vice president, declined to comment beyond referring to a press release that suggests the company will continue.
Two California plants also stopped operations in January. Initially, the Burley closure was announced as a routine annual maintenance shutdown.
Pacific Ethanol reported 2008 losses of $146.6 million, compared to $14.4 million in 2007. According to CEO Neil Koehler, the cash losses are closer to $55 million. The company owes $250 million to various lenders.
"I've been told that they've renegotiated with their banks and that they have a $20 million line of operating credit," Burley City Administrator Mark Mitton said.
The company continues to pay property taxes and other fees to Burley and Cassia County. Burley Mayor Jon Anderson said he doesn't expect that to change, regardless of where the bankruptcy leads.
"We would anticipate that the bank will make sure those taxes will be paid to avoid a lien on the property," he said, adding that the bankruptcy could actually benefit Burley.
"They're still saying this is their most viable plant," Anderson said. "Even if they have to petition the court to sell assets, a buyer would have a viable, ready-to-operate plant ?- It might open quicker that way."
Without a specific statement from the company, nobody knows exactly what will happen.
"We're just waiting to hear what they'll do with some recapitalization they're working on," Doug Manning, Burley's economic development director, said.
City Councilman Steve McGill reflected the prevailing opinion in the community.
"I hope they reopen," he said.
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