Florida Biomass Fuel Supplier Files for Bankruptcy
– by Niko Clemmons, February 2, 2016, WCJB
A North Central Florida company that provided fuel to Gainesville’s biomass plant has filed for chapter 11 bankruptcy. This comes after they say the company that owns the plant breached their contract with the waste recycling company last year.
An attorney for Wood Resource Recovery says after the Gainesville Renewable Energy Center violated its contract with his client, they were unable to take care of all the debt on the all the equipment purchased to provide biomass to the plant. Wood Resource will now have to reorganize to compensate for their losses.
Attorney Jeff Childers says without any warning, GREC breached its contract with his client last April. Wood Resource was under contract to supply nearly half of all the biomass fuel to the plant.
“My client had invested an enormous amount money to tool up in order to provide the biomass to the plant. They bought a lot of equipment and in order to buy the equipment they took out loans with banks and basically invested in a pretty significant infrastructure to do that,” Childers says.
Wood Resource Recovery filed a lawsuit last April, claiming the contract being violated. Lawyers for the waste recycling company say they are seeking damages in excess of $25 million dollars from GREC. In the last week, Wood Resource filed for chapter 11. The company is required to propose a plan and negotiate to try and restructure the contracts they have with several creditors.
“Just the fact of having to reorganize should probably tell you that you need to know. I mean nobody organizes cause it’s the easy thing to do. It’s a very difficult process and it creates a lot of wear and tear on the people and the company to get through reorganization,” Childers says.
The trial between Wood Resource Recovery and GREC is scheduled for May 2. GREC is not making any comment at this time. Bill Gaston of Wood Resource declined an interview as well.