More details emerge on VeraSun bankruptcy; current shareholders facing wipeout

In South Dakota, more details emerged regarding the VeraSun Energy bankruptcy. According to the company’s bankruptcy filing, VeraSun attributed the Chapter 11 filing to a combination of low ethanol margins, tight credit and high corn prices. The company listed assets of $3.45 billion and liabilities of $1.91 billion. According to Debtwire, the company’s debtor-in-possession financing will come at a cost of LIBOR plus 1100 basis points for $250 million in financing. In a note to clients, Raymond James analyst Pavel Molchanov said that “current shareholders are likely to see minimal to no recovery following the reorganization… We expect to learn this week whether or not the shares will remain listed on the NYSE.”

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