Earth Biofuels reaches out-of-court settlement with creditors who filed involuntary bankruptcy petition

Earth BioFuels reached an out-of-court settlement with a group of creditors who filed for involuntary bankruptcy in July. In the agreement, Earth BioFuels will repay interest and fees plus more than $100 million in principal, and the company’s CEO will issue a limited personal guarantee. The company recorded a loss of $21 million on revenue of $4.8 million in the first half of 2007.

The company’s stock rose 6.8 percent, to $0.047, on the news.

Last month, the Willie Nelson-affiliated company, in its latest SEC filing, expressed doubt over its ability to survive.

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