Pacific Ethanol issues 3.25 million shares under claim settlement

By Caroline Salls

Pittsburgh, March 22 - Pacific Ethanol, Inc. has issued 3.25 million shares of common stock to Socius CG II, Ltd. in settlement of a $5 million claim Socius purchased from Lyles United, LLC, according to an 8-K filed with the Securities and Exchange Commission.

The company said it originally issued 5 million shares to Socius under the settlement, and Socius returned 2.55 million of the settlement shares in accordance with the agreement.

According to the 8-K, the claim in question consisted of the right to receive $5 million under a $30 million loan made by Lyles United to Pacific Ethanol.

On March 15, Socius and Lyles entered into an agreement under which Socius will buy Lyles' right to receive payment on a $5 million portion of Pacific Ethanol's total of $25 million debt to Lyles.

In connection with the purchase of the second claim and under the terms of the purchase agreement, Socius filed a complaint for damages against Pacific Ethanol.

Pacific Ethanol's counsel and Socius' counsel have filed a joint motion for approval of the claim settlement. A hearing is scheduled for March 23.

Pacific Ethanol is a Sacramento-based marketer and producer of ethanol. It filed for Chapter 11 bankruptcy on May 18, 2009 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-11713.

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