Wall St. cleantech darling VeraSun filed for bankruptcy. Allow me to translate their corporate lawyer speak into language more descriptive of their problems. The company rode a wave of government incentives designed to help corn farmers in Iowa, Nebraska, and Illinois, which gave VeraSun access to a lot of capital that they took full advantage of, $2 billion worth. This government intervention drove up corn prices which VeraSun made long term bets on the pricing of, which subsequently collapsed along with all other commodity prices.
VeraSun attempts to pawn off their bankruptcy on global credit markets when in fact they simply lost a boatload of money on the wrong side of corn prices and their debt load made for one very top heavy boat in rough seas they were unable to borrow more money to service the debt on.
“Worsening capital market conditions and a tightening of trade credit resulted in severe constraints on the Company’s liquidity position,” the company said. It intends to work with lenders to secure “additional committed financing to provide adequate liquidity to fund operations in the normal course.”