Wisconsin ethanol pioneers face $100M-plus debtOSHKOSH, Wis. — Two Wisconsin brothers who pioneered ethanol production in the state are left with outstanding debts totaling more than $100 million after their agricultural empire imploded, according to a newspaper report.
OSHKOSH, Wis. — Two Wisconsin brothers who pioneered ethanol production in the state are left with outstanding debts totaling more than $100 million after their agricultural empire imploded, according to a newspaper report.
Paul and David Olsen owe money to several banks, attorneys, the Wisconsin Department of Transportation and their mother, with outstanding debts totaling $104 million, the Oshkosh Northwestern (http://bit.ly/jrgiLo) reported.
At one time, the Olsens owed stakes in two ethanol plants, a crop service that provides fertilizer and seed to farmers, five farms and grain mills that bought crops from farmers in 10 locations throughout central and eastern Wisconsin.
But the family businesses became ensnared in the ethanol industry crash as ethanol prices dropped and corn prices rose sharply in 2008 and 2009.
“Matters out of their control just went spectacularly against them. And they weren’t the only ones,” Wisconsin Corn Growers Association Executive Director Bob Oleson said. “The ethanol business has been turned upside-down.”
The Olsen’s Mill Inc. reorganization battle began two years ago in a Green Lake County courthouse and has since spread to the Wisconsin Supreme Court, the New York Supreme Court, four county courthouses and, in December, to the U.S. District Court for Eastern Wisconsin, where Paul and David Olsen filed for personal bankruptcy.
The Olsens, their partners and investors had opened the 110-million-gallon Renew Energy ethanol plant in Jefferson in 2007, but on Jan. 30, 2009, the company filed for bankruptcy. Two weeks later, BNP Paribas, a European bank, forced Olsen’s Mill into receivership with a Green Lake County lawsuit to recoup the $50 million it had loaned Olsen’s Mill to buy grain and fund its operations.
When Green Lake County Judge William McMonigal opted to sell the mill’s assets to C.R. Meyer President Phil Martini, who now owns the mills under the name Wisconsin Ag Services Inc., instead of BNP in April 2009, the bank filed a lawsuit in New York and appealed McMonigal’s decision in Wisconsin. BNP also sued the Olsen brothers based on personal guarantees they had made for the Olsen’s Mill debt, forcing the bankruptcy filings.
David and Paul Olsen filed separate bankruptcy protection petitions on Dec. 16, 2010, under Chapter 11, but the cases have since been combined because of the commingling of their assets and debts.
Melissa Blair, an attorney who has represented the Olsens in some of the litigation they face, said attorneys from the Milwaukee law firm Kerkman and Dunn have taken over the bankruptcy proceedings, but a representative of that firm did not return a telephone call from The Associated Press for comment Thursday. Blair said the focus is now on trying to resolve some of the legal entanglements.
“At this point, we’re just hoping to try and reach a good resolution for everyone involved,” Blair said.
Members of the Olsen family declined to comment Wednesday. Joe Wielebinski and Russell Munsch, the Dallas-based attorneys representing BNP Paribas in the Olsen cases, also declined to comment.
According to Paul Olsen’s bankruptcy case files, the brothers’ personally guaranteed and are responsible for $50.7 million that Olsen’s Mill borrowed from BNP Paribas and $20.7 million Utica Energy borrowed from Minneapolis-based Dougherty Funding LLC. Bankruptcy court records also show that, among other debts, the Olsens also owe West Pointe Bank $27.5 million on property mortgages, Citizens First Bank $1.2 million on a mortgage of their Viroqua grain elevator, and WisDOT $2.5 million related to financial assistance to install rail spurs and purchase train cars.
In addition, Vivadell Olsen, Paul and David’s mother, is owed $200,000 on mortgages on grain elevators, the Northwestern reported.
Paul and David’s brother, state Sen. Luther Olsen, R-Ripon, said he had a stake in Olsen’s Mill, but his brothers ran the company and he had no involvement in Olsen Brothers Enterprises. Still, he said it was hard to watch the downward slide happen.
“During the recession, things go out of control,” Luther Olsen said. “One domino falls and they all fall.”