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Texas biofuels group Terrabon files for bankruptcy

09.10.2012  | 

The company has the licenses on technologies from Texas A&M University System, where they were developed and where it was formed to bring the products to market. However, it couldn't obtain the additional financing necessary to finish developing a commercial plant.

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By STEPHANIE GLEASON

Houston biofuel company Terrabon Inc. filed for Chapter 7 bankruptcy Friday and shut down operations after it failed to get new financing to continue work on its technologies.

The company has the licenses on technologies from Texas A&M University System, where they were developed and where it was formed to bring the products to market. However, it couldn't obtain the additional financing necessary to finish developing a commercial plant.

Its MixAlco technology converts materials like sewage, wood chips and nonedible crops into renewable gasoline, jet fuel or diesel. The fuel has a higher energy value than ethanol and can be blended with gasoline directly, Terrabon said in documents filed with the US Bankruptcy Court in Houston.

Another technology called SoluPro converts waste material, like shrimp heads and chicken feathers, into animal feed and commercial adhesives and it has the licenses on a desalination process that produces potable water, which it calls AdVE.

The company owns 12 US patents and has 17 more US patent applications.

However, on Friday, Terrabon suspended operations and laid off all 60 of its employees.

“It is with great disappointment we announce Terrabon has been unable to obtain additional financing and must suspend operations,” Terrabon CEO Gary Luce said in a statement. “This is a sad day for Terrabon's employees, partners, suppliers and vendors who never wavered from their robust support of our company and the technology we deeply believe in.”

Terrabon had received investments from Waste Management, Valero Energy, the Texas A&M System and the Texas Emerging Technologies Fund.

Terrabon is at least the fourth company to enter bankruptcy that received a grant from Texas Gov. Rick Perry’s Emerging Technology Fund. The governor's office in Texas didn't immediately respond to a request for comment Monday.

Overall, the company has $22.8 million in debt, including a $10 million line of credit from Comerica Bank that is guaranteed by Waste Management and $2.75 million from the Texas Emerging Technology Fund.

Terrabon doesn't have any profits yet, as it is still a development-stage company, but did list $371,000 worth of assets.

Formed in 1995, Terrabon had completed a demonstration plant in Bryan, Texas, capable of producing 50,000 gal/year of desalinated water.

According to its website, Terrabon broke ground on its bio-refinery in 2011 and had hoped to complete the facility by 2013.


Dow Jones Newswires



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