Frequently Asked Questions for Vendors and Suppliers
What is the Chapter 11 process all about?
Chapter 11 is a legal mechanism for court-supervised reorganization or restructuring of a company’s obligations. Chapter 11 provides a way for companies to gain time to restructure and reduce their debts while continuing day-to-day operations.
What entities filed for Chapter 11?
Each of the ethanol plants, Madera, Stockton, Columbia, and Magic Valley and the holding company of those plants, Pacific Ethanol Holding Co., filed for Chapter 11. The Company and its marketing subsidiaries, Kinergy Marketing LLC ("Kinergy") and Pacific Ag. Products, LLC ("PAP"), have not filed for Chapter 11 bankruptcy protection. The Company is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries’ ethanol and feed production under existing Marketing Agreements.
Why did Pacific Ethanol file to reorganize under Chapter 11?
We took this action in order to complete the restructuring initiatives necessary to restructure the debt associated with the Plants.
After reviewing the various alternatives available, we concluded that Chapter 11 provides the most effective, efficient means to restructure the company in a process that will enable us to capitalize on opportunities for future growth and profitability.
What if I have outstanding invoices with businesses that are part of Pacific Ethanol but did not file for Chapter 11?
These will be paid in the normal course of business.
Will suppliers continue to be paid for goods and services they provide to Pacific Ethanol?
All goods and services delivered or provided after the Chapter 11 filing are treated like normal accounts payable, and are paid under normal course terms.
I have unpaid invoices from the filing entities dated before the bankruptcy date (i.e. pre-petition invoices). What should I do?
As part of the Chapter 11 process, a letter and claim form will be sent to the companies’ vendors, which should be completed and returned as instructed on the form.
Will I need a claim form, or will I automatically be paid for the outstanding, pre-petition amount owed to me?
You will need to complete the claim form to ensure you are properly included in the estate that will be handled in the new plan of reorganization.
How long will the reorganization process take?
It’s impossible to predict exactly how long the reorganization will take. Our goal is to complete the reorganization and emerge from Chapter 11 as quickly as possible.
When will I receive payment for goods delivered after the bankruptcy date?
Payments are made in ordinary course manner.
Where can I get more information?
Information about the proceedings is available at http://chap11.epiqsystems.com/PEI/project/default.aspx