Hawkeye Renewables out of bankruptcy under new equity ownership

By Caroline Salls

Pittsburgh, June 21 - Hawkeye Renewables, LLC emerged from Chapter 11 bankruptcy under new equity ownership when its plan of reorganization took effect on Friday, according to a company news release.

The plan was confirmed on June 21 by the U.S. Bankruptcy Court for the District of Delaware.

"It is important for farmers and producers who sell corn to Hawkeye Renewables to know that both plants are emerging from this process with significant working capital, minimal debt, and a new balance sheet," newly elected chairman of the board Jim Continenza said in the release.

"We believe the financial future of the two plants has been stabilized and the two plants will continue to make positive contributions to their local communities."

Although the two plants are no longer owned by Hawkeye Energy Holdings, the company said it will continue to manage the plants. Hawkeye subsidiary Hawkeye Gold, LLC will continue to market Renewables' ethanol and distillers grains.

In connection with its bankruptcy, Hawkeye Renewables' debt was converted into equity and the principal equity owners following emergence are former first-lien debtholders, who represent a number of recognized investment firms.

Creditor treatment will include:

• Holders of first-lien credit agreement claims will receive their share of $25 million in new secured term loans and new class A, B and C units. The class B and C units will be transferred to holders of second-lien claims;

• Holders of second-lien credit agreement claims will receive a share of new class B units and new class C units;

• Holders of general unsecured claims and equity interests will receive no distribution;

• Holders of priority claims will be paid in full in cash; and

• Holders of other secured claims will either be paid in full in cash, receive the collateral securing the claim or have their claims reinstated.

The reorganized company's board of directors is comprised of Continenza, Mark A. Beemer, Donald J. Draizin and Steven C. Pumilia. Bruce Rastetter will also serve as a board member representing the company's management team.

Hawkeye Renewables is an Iowa Falls, Iowa, manufacturer of alcohol-based fuel derived from corn. It filed for bankruptcy on Dec. 21, 2009. The Chapter 11 case number is 09-14461.

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