Just a couple of years ago, Cumberland County-based biodiesel producer Keystone BioFuels Inc. was a promising story with plans to expand production and add employees. But today it is in Chapter 11 bankruptcy protection and owes millions of dollars to creditors.
Keystone BioFuels, with its production facility in Lower Allen Township, filed for Chapter 11 in March, according to records at the U.S. Bankruptcy Court for the Middle District of Pennsylvania.
Keystone owes more than $2.8 million to its top 20 creditors alone, according to the filing. The largest debt in that top 20 is more than $800,000 to Petroleum Products Corp., a wholesale fuel station in Lower Swatara Township, Dauphin County.
Although the day looks dark, nails haven’t yet been hammered home on Keystone’s coffin.
“We’re still excited about (our expansion),” said Ben Wootton, Keystone’s president and CEO.
That’s because the company is working through Chapter 11 to get a better position on its debt, is working toward paying back creditors and has potential investors that could help propel the company further in the biodiesel industry, Wootton said. Keystone could partner with a national company that is expanding its operations, Wootton said, although he declined to identify the potential investor.
In the latest action, on July 22, the court gave Keystone until Sept. 4 to pay its landlord rent for April, July and August for its manufacturing facility at 2850 Appleton St.
Fall from grace
Keystone’s June financial report as part of the bankruptcy process shows it had total receipts of $140,800, but accounts receivable were just $1,839. Its operations statement shows no revenue for June.
At the end of the month, Keystone had a net loss of nearly $62,300, with a cumulative loss of more than $145,500, according to filings.
That’s a long way from 2011, when the company intended to increase production and hire about 14 people, doubling the company’s staff.