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Published November 04, 2013, 10:17 AM

North Dakotans await new Energae hearing

The judge set Nov. 5 as the hearing date.

By: Mikkel Pates, Agweek

FARGO, N.D. — A Cerro Gordo County, Iowa, judge set Nov. 5 as the hearing date for the second in a series of petitions by North Dakota shareholders to put the Energae LP company into receivership.

Judge Colleen Wieland on Oct. 23 set the hearing in the case of Clifton and Joshua Hylden of Park River, N.D., as well as the Rev. Lee Laaveg of the Spencer, Iowa, in a petition involving Energae LP and i-Lenders LLC, all based in Clear Lake, Iowa, or nearby Mason City, Iowa. The hearing is set for 10:30 a.m. Nov. 5 at the Cerro Gordo County Courthouse, but a judge for the case was not selected.

“Energae and i-Lenders have failed to respond to the petition,” say attorneys Alan Rosca and Joe Peiffer of Cleveland, Ohio, who represents the plaintiffs. “No representative of the two entities has entered an appearance on their behalf in this case, even though both were duly and timely notified of the proceedings.”

The firm that Rosca and Peiffer work with on Oct. 24 said a notice of default was mailed to the two companies’ last known registered agents, along with the court’s order.

The earlier state petition for receivership was filed by Robert Hylden and Darren Sheldon, both of Fargo, N.D., on Aug. 5, but was “settled” Aug. 26, on the eve of an Aug. 27 hearing in Mason City. Clifton is a brother to both Robert and the Rev. Todd Hylden, a Lutheran pastor from Fergus Falls, Minn., who formerly was vice president of marketing for Energae LP.

Energae officials include Duane Darrell Smith of Forest City, who was identified as director of operations for the company during a meeting in Grafton, N.D., in 2012. Smith was promoting a plan for farmers to put a minimum of $10,000 into the company and to put sugar beets through a sugar beet to ethanol plant. Energae and i-Lenders are associated with other ethanol and wood-to-electricity plants in Iowa, among other things. The Grafton plans fell through.

In 2013, Smith dropped appeals and permanently was stripped of his insurance and securities licenses by the Iowa Insurance Division.

Separately, federal officials appear interested in the company. On Oct. 3, Smith’s home and places of business were visited by FBI and other officials, who carried out documents. On Oct. 23, some former Energae officials testified at a federal grand jury in Cedar Rapids, Iowa, after being subpoenaed by the Internal Revenue Service. Federal officials have not commented on any outcome of a grand jury, nor have they acknowledged its existence.