Greenline files for Chapter 7 liquidation: cautionary tale, downloadable
In California, former industry leader in waterless biodiesel Greenline Indistries filed for Chapter 7 bankruptcy liquidation, ending a 17-month saga following a $20 million investment in the company by Leaf Clean Energy/EEA North America.
Leaf Clean, which owned 77.8 percent of equity at the time of the liquidation filing, had pumped an additional $153,000 into the company in June and July to continue business operations.
Where does $20.15 million go in 18 months?
“They ended up litigating pretty much every single agreement they signed, hired incredibly expensive, but inexperienced executives, battled it out with corporate shareholder games and generally behaved like cats in a bag,” said a creditor familiar with the company’s decline in fortunes.
The company had gone through three CEOs in the final 13 months, and had terminated two CFOs and a COO as well. More than $1 million had been paid out to insiders in the form of compensation in the final 12 months prior to the filing. A copy of the financial declarations of the company in the filing can be downloaded here.
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triumph181 | Aug 14, 2009 | Reply
This a sad day in the biodiesel industry, Greenline was an idealistic small company that had great intentions based on mediocre management implementation. In the beginning, the company was fueled by a sincere wish to change the world. That dream died when they decided to become a “corporation” based on venture funds and managed by a team more interested in the “funds” than the “venture”. In the end they all lost more than just the money, but also a part of their souls.
bio7 | Aug 15, 2009 | Reply
You have only to look at the number of companies that are filing chapter 11 and chapter 7 to realize most of Greenline’s demise is the economy. That, along with Leaf’s implementation of a management team with no vision sealed the deal for Gli’s end.
Prior to Leaf, Greenline sold more than 20 plants. After Leaf, zero.
Recession+bad management=Chapter 7.
New Beginnings | Aug 15, 2009 | Reply
> Sometimes change in the way a business is managed is good. The old Greenline corporation may be financially on the rocks but the technology is still sound and the dream still lives. A leaner and wiser team is emerging. They are building on the founders experience and responding to a loyal customer base. Don’t be surprised to see a “new Greenline” arrive back on the bio-energy scene with it’s modular designs, waterless, multi-feedstock process and those same idealistic green philosophies that were there in the beginning.