World Energy Associates denies it is in bankruptcy

In Massachusetts, World Energy Alternatives has denied it is in bankruptcy, after a suit filed by  Elbow River Marketing in bankruptcy court forced the company into involuntary Chapter 7 bankruptcy proceedings.

The two companies had formed a joint venture to market biodiesel. A complaint filed by Elbow River alleged that WEA converted joint venture funds for its own use and that Elbow River is now owed as much as $30 million.

World Energy issued the following statement: “World Energy is in a dispute with Avenir Diversified Income Trust’s (AVF.UN) subsidiary Elbow River Marketing (ERM) involving substantial claims each party is making against the other.  Earlier this week, ERM unilaterally and without the support of any other creditors filed an unsubstantiated petition to place World Energy in Chapter 7 bankruptcy.  The court has not yet heard or ruled on this matter.  World Energy expects the case to be dismissed.

“In April 2009, Avenir announced that ERM’s biodiesel business lost $15.9 million in the fourth quarter of 2008 and expects to lose an additional $10.5 million in bio-diesel charges and hedging losses in the first quarter of 2009.

“Avenir’s foray into and hasty exit from the biodiesel market has been marked by mismanagement, poor fiscal oversight, and a lack of appropriate internal controls.  World Energy intends to hold Avenir’s subsidiary accountable for all damages, including those related to ERM’s improperly filed petition in bankruptcy court this week.”

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