Hereford Biofuels: Insurer seeks judgment in litigation claims sale

By Lisa Kerner

Charlotte, N.C., Aug. 24 - Hereford Biofuels, LP's former property insurer, Factory Mutual Insurance Co., asked the court to enforce a sale order and declaratory judgment related to Hereford's April 24, 2009 sale of construction litigation claims, according to a Tuesday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

Hereford Acquisition is an affiliate of Panda Energy International, Inc., the majority shareholder of Hereford Biofuels' parent, Panda Ethanol, Inc.

Panda did not make any competing bids at the auction for the claims and later filed objections to the sale, the filing said.

Factory Mutual is seeking payment of costs and fees. In addition, Factory Mutual wants Panda to drop the lawsuit it filed against Factory Mutual in July 2010 claiming breach of contract and violations of the Texas Insurance Code.

In September 2009 the court converted Hereford's Chapter 11 case to Chapter 7.

Dallas-based Panda Ethanol develops ethanol fuel plants. Its Hereford subsidiaries filed bankruptcy on Jan. 29, 2009. Their Chapter 11 cases are being administered under case number 09-30453.

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