KiOR cancels bankruptcy auction

By Erin Voegele | January 09, 2015

KiOR’s bankruptcy auction, scheduled for Jan. 9, has been cancelled. According to documents filed with the U.S. Bankruptcy Court for the District of Delaware, the company is expected to proceed with a Chapter 11 bankruptcy reorganization plan filed with the court in mid-December.

In December, the court set the bid deadline for Jan. 7, with the auction scheduled for Jan. 9. According to documents filed with the court by KiOR on Jan. 8, no bids were made, other than the qualified bid from the stalking horse bidder, prior to the deadline. As such, the debtor has cancelled the auction.

KiOR filed a voluntary petition for Chapter 11 bankruptcy in November. The company’s idle biorefinery in Columbus, Mississippi, which is owned KiOR Columbus LLC, a wholly owned subsidiary of KiOR, is not included in the filing. 

In November, the company indicated it had accepted a bid for substantially all of its assets from affiliates of Vinod Khosla, referred to at the Staking Horse Bidder. Under the bankruptcy filing, the bid would have been subject to higher and better offers and court approval. The Dec. 8 filing made with the court indicates KiOR will now proceed with a Chapter 11 plan of reorganization filed on Dec. 15.

The Mississippi Development Authority, however, has filed a motion asking the court to convert the Chapter 11, or reorganization bankruptcy, to a Chapter 7, or liquidation bankruptcy. MDA had provided KiOR with a $75 million loan in 2011. The company was unable to make a scheduled payment on the loan in mid-2013 and entered into a forbearance agreement with the MDA in early July. A filing made with the U.S. Securities and Exchange Commission in November notes that the company received a notice of default and acceleration from the MDA on Nov. 3, indicating that the forbearance agreement period expired Oct. 31 and that all obligations under the loan documents are due and payable within three days of Nov. 3. As of Oct. 31, the filing indicated the aggregate amount due and payable to the MDA was more than $78.57 million.