Seed Companies Sue AltEn Over Cleanup

Editor's Note: This story was originally published Wednesday, Feb. 23, 2022. It was updated on Thursday, Feb. 24, to include another seed company that is suing AltEn LLC.

LINCOLN, Neb. (DTN) -- Seed companies have filed federal lawsuits against Nebraska company AltEn LLC which operated a closed-loop ethanol plant at the center of an environmental disaster, accusing the company of selling off its assets, abandoning the site in Mead, Nebraska, and not helping in the cleanup effort.

In two civil lawsuits filed in the U.S. District Court for the District of Nebraska in Omaha this week, six seed companies have asked the court to award compensation for the costs incurred during an ongoing cleanup.

They have asked the court to declare AltEn's alleged asset sales to be void under state law and have asked for an injunction to prevent the company from selling any additional assets. All the companies suing have alleged breach of contract by AltEn.

The companies filing one lawsuit include Pioneer Hi-Bred International Inc., Corteva Agriscience LLC, AgReliant Genetics LLC, Beck's Superior Hybrids Inc. and Winfield Solutions LLC.

"Instead of complying with various emergency orders issued by the Nebraska Department of Environment and Energy and engaging in remediation efforts, AltEn and its officers and affiliates -- led by Tanner Shaw -- have abandoned the site, sold off their assets to prevent their creditors (including the state and plaintiffs) from having access to assets necessary to perform remediation and reimburse plaintiffs for the costs they have incurred at the site," the lawsuit alleges.

The companies said AltEn's actions have "hindered the response and stabilization efforts" and the company has "refused to undertake or participate in any way" in the cleanup efforts. The lawsuit names several companies affiliated with AltEn as defendants.

"Plaintiffs have incurred millions of dollars in costs to perform a wide range of response actions under the oversight of the NDEE in an effort to stabilize the site," the lawsuit said.

In addition, Syngenta Seeds LLC filed a similar lawsuit in the district court saying the companies have spent "several million dollars" on the cleanup to this point. Syngenta names AltEn president Tanner Shaw and manager Scott Tingelhoff as defendants.

"While Syngenta and the other members of the AFRG (seed companies involved in cleanup) have been engaged in substantial response and stabilization activities at the AltEn facility, defendants have undertaken no efforts to address the environmental conditions they caused," Syngenta said in its lawsuit.

Following the February 2021 spill, AltEn has not conducted regular operations at the AltEn facility, nor has it taken responsibility for any site operations or maintenance activities, except to auction equipment and materials left on site. In the course of auctioning equipment and materials, AltEn and its contractors have engaged in activities believed to have contributed additional wastewater to the lagoons."

The lawsuits come nearly six weeks after the state of Nebraska approved plans by AltEn's "Facility Response Group" -- AFRG, a group headed by seed companies and remediation engineers -- to treat 150 million gallons of pesticide-contaminated water now stored at four lagoons on the AltEn property.

The AltEn plant ran into a series of environmental problems and was shut down by the state in spring 2021.

The plant stored on site corn seeds treated with neonicotinoid insecticides and fungicides. AltEn did not dispose of the pesticide-contaminated distillers grains and wastewater properly. A group of seed companies that provided seed to the plant have been undertaking cleanup of lagoons near the plant.

Last summer, the state of Nebraska granted approval to a voluntary cleanup of the site requested by a coalition of companies that includes AgReliant, Bayer U.S. LLC, Beck's, Corteva, Syngenta and WinField.

In recent weeks, a group of protestors gathered outside the state capitol building in Lincoln, raising concerns the state hasn't done enough to clean up the site.

FINANCIAL ABANDOMENT ALLEGED

The five seed companies' lawsuit said AltEn not only physically abandoned the ethanol plant but "financially abandoned" the operation, including its debts and other obligations. The actions by AltEn, the lawsuit said, are hurting the efforts to clean up the site.

They said there is a "growing list of vendors who are now approaching Corteva, AgReliant, Beck's, Winfield, and the other seed companies to take over AltEn's financial responsibilities," according to the lawsuit. "Several contractors have refused to perform remediation and stabilization work at the AltEn Facility due to nonpayment from AltEn."

In addition, the seed companies said they have been paying AltEn's utility bills as well as assumed leases in various site buildings to keep the stabilization efforts going in Mead.

Syngenta said in its lawsuit AltEn has "failed to pay" more than $23,000 in property taxes for the site.

The first lawsuit outlines the effort by AltEn to sell off assets and essentially divest itself from the property and the cleanup. Both lawsuits ask the court to stop AltEn from profiting on ongoing asset sales.

"At least by June 2021, AltEn had sold more than 80 pieces of equipment and parts used at the AltEn facility, including semi-trucks, forklifts, stainless-steel piping, and electrical conduit, through BigIron Auctions," the first lawsuit said.

As recently as Feb. 14, 2022, the lawsuit said, AltEn representatives removed "additional equipment" from the site to sell at auction.

"AltEn's retention of auction companies, such as BigIron Auctions, to prepare AltEn's assets for auction have added to the burden of response activities for the Corteva, AgReliant, Beck's, Winfield, and the other seed companies, including in that at least one auction company power-washed equipment without using proper erosion/containment mitigation protection," the lawsuit said.

ALTEN LEADERSHIP

Despite concerns about materials at the plant, AltEn's Shaw, in December 2021, informed Nebraska regulators that he had plans to sell 600 "supersacks" of biochar from treated seed even though tests from the Nebraska Department of Environment and Energy showed the biochar had elevated levels of neonicotinoid pesticides.

Shaw planned to sell the biochar to a Kansas farmer, Brady Yingling, who operates a farm and ranch operation near Topeka, Kansas, as well as a lawn-care company. Once Yingling learned the biochar contained chemicals from treated seeds, he canceled the purchase.

In the first lawsuit, the seed companies said there are more than 1,100 bags of the biochar still on site.

The lawsuit names several other companies presumably operated by Shaw, including AltEn, Mead Cattle Company near the ethanol plant, Green Disposal, and Platte River Green Fuels.

The seed companies allege the companies run by "owned or controlled" by Shaw "presumably by design, impossible to determine. There are dozens of AltEn-related entities, all of which constantly change names, places of incorporation, or become inactive," the lawsuit said.

"Upon information and belief, Shaw and other owners or members grossly undercapitalized the defendant companies. Upon information and belief, Shaw diverted funds from the defendant companies for his own improper uses," the lawsuit said.

"Upon information and belief, the defendant companies are mere facades for the personal dealings of Shaw and their operations are carried on by Shaw in disregard of the corporate entities. The defendant companies are the alter egos of Shaw, and the corporate veil should be pierced and Shaw held personally liable for all of the entities' actions. Upon information and belief, Shaw exercised his control over the defendant companies to commit a fraud against plaintiffs."

Shaw did not respond to DTN's request for comment.

A spokesperson for Corteva provided the following statement to DTN, reading in part:

"As a former customer of AltEn, we are frustrated with how AltEn handled materials at its own site and its failure to follow label requirements and the specific safe-handling procedures outlined in Corteva's agreement with AltEn, as well as its lack of compliance with federal and state environmental regulations.

"Corteva joined with other former customers -- known as the AltEn Facility Response Group -- to voluntarily assist with stabilization of the AltEn site under the oversight of the Nebraska Department of Environment and Energy. To date, AltEn itself has not participated in any actions to stabilize or address the environmental conditions at its own site and, in some cases, has hindered the FRG's work."

Read more on DTN:

"AltEn Owner Tries to Sell Toxic Biochar," https://www.dtnpf.com/…

"Health Monitoring Planned in Mead, NE," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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