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Abengoa, Kansas ethanol plant operator, may seek bankruptcy

A company that has a taxpayer-guaranteed loan may be entering bankruptcy. Will taxpayers have to pay?

(Updated November 30) Spanish energy giant Abengoa has taken preliminary steps that could lead to bankruptcy filing.

Of relevance to Kansas — and the country at large — is the Abengoa cellulosic ethanol plant near Hugoton. That plant received a $132.4 million loan guarantee from the United States government under the same program that benefited Solyndra. That company cost taxpayers over $500 million when it defaulted on its taxpayer-guaranteed loan.

Does a bankruptcy filing by Abengoa place U.S. taxpayers on the hook for the company’s guaranteed loan? If so, are taxpayers liable for the entire $132.4 million or some smaller portion?

The answer is this: We don’t know. I’ve asked for, and have received the loan guarantee agreement. It’s unclear to me what would happen if Abengoa entered bankruptcy.

Following, reporting from the Wall Street Journal. It mentions “debt-fueled expansion,” some of which is a liability of the U.S. taxpayer.

Spain’s Abengoa Files for Creditor Protection
The company’s debt-fueled expansion in the boom years is handicapping growth today

MADRID — Spanish renewable energy and engineering firm Abengoa SA said on Wednesday that it is filing for preliminary creditor protection, an initial step that could lead to the largest bankruptcy case in the country’s history.

The potential demise of Abengoa is an extreme example of a Spanish company whose debt-fueled expansion during the country’s boom years has handicapped its ambitions for growth today.

The company is one of the world’s top builders of power lines transporting energy across Latin America and a top engineering and construction business, making massive renewable-energy power plants in places from Kansas to the U.K.

Continue reading at Wall Street Journal.

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One Comment

  1. ictator November 29, 2015

    Is this creative destruction from the marketplace? Or is it creative destruction (CD) from the US govt.? Or is it CD from the EU? Or some combination of all of the above?

    Forensic accountants and economists have a fiscal autopsy to perform in the public interest due to the tax funds involved.

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