In re Abengoa Bioenergy Biomass of Kansas, LLC

2018 WL 812941 (2018)

From our private database of 46,500+ case briefs, written and edited by humans—never with AI.

In re Abengoa Bioenergy Biomass of Kansas, LLC

United States Bankruptcy Court for the District of Kansas
2018 WL 812941 (2018)

Facts

Abengoa Bioenergy Biomass of Kansas, LLC (ABBK) (debtor) was part of the United States bioenergy group of Spanish corporation Abengoa, S.A. ABBK’s principal asset was an ethanol-and-cogeneration plant that ABBK built in Hugoton, Kansas. ABBK received over $100 million from the United States Department of Energy for the plant. After that money ran out, ABBK obtained funding from Abengoa and ABBK’s affiliates through intercompany transactions. In February 2016, several of ABBK’s affiliates filed voluntary chapter 11 bankruptcy cases in Missouri. The companies’ combined reorganization plan was confirmed in that action. In March 2016, several of ABBK’s creditors filed an involuntary chapter 7 petition against ABBK in Kansas. ABBK converted the case to a chapter 11 case and subsequently sold its plant for $48.5 million. In April 2017, ABBK filed its reorganization plan in the bankruptcy proceeding. The plan classified claims from ABBK’s general unsecured third-party creditors as Class 2 and provided that those claims would be paid pro rata. However, the plan classified the unsecured intercompany claims from the other Abengoa entities as Class 3 and provided that those claims would not be paid. The trustee (creditor) for the ABBK-affiliated debtors in the Missouri action, which held four of the Class 3 intercompany claims, objected to ABBK’s reorganization plan. The trustee asserted that the classification of the intercompany claims was improper. The trustee further argued that the ABBK affiliates’ claims would have been paid pro rata in a chapter 7 action and asserted that because ABBK’s reorganization plan did not provide for the affiliates to receive at least that much, the plan was not in the affiliates’ best interests under 11 U.S.C. § 1129(a)(7)(A)(ii). ABBK’s executive vice president testified that ABBK and its affiliates were integrated entities, and the affiliates knew that ABBK was completely dependent on Abengoa and the affiliates for funding. The affiliates also knew that ABBK’s plant would not be profitable, and none of the affiliates expected to be repaid. The executive vice president also gave undisputed testimony that the subordination and nonpayment of intercompany debts was part of the bioenergy group’s shared management strategy.

Rule of Law

Issue

Holding and Reasoning (Nugent, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 832,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

Here's why 832,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,500 briefs, keyed to 994 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 832,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,500 briefs - keyed to 994 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership