AltEn Fights Bayer on Plant Cleanup

LINCOLN, Neb. (DTN) -- Bayer and other seed companies have spent more than $28 million in the ongoing environmental cleanup of the former AltEn LLC ethanol plant site in Mead, Nebraska, and now one of many business entities that were part of the corporate structure operating the plant is trying to prevent the seed companies from recovering that money.

Bayer obtained a court order to freeze all AltEn assets in February 2023 and filed an amended complaint in June 2023, to include all business entities wrapped up in the AltEn structure.

Those entities include Mead Cattle Company, LLC; Green Disposal Mead, LLC; Platte River Green Fuels, LLC; Earth, Energy and Environment LLC; AltEn Operating Company; E3 Biofuels LLC; Integrated Recycling, LLC; Falcon Energy, LLC; Mead Acquisition Company, LLC; Gubbels Ventures, LLC; and Tanner Shaw, the owner and operator of AltEn.

One of the entities run by Shaw, Gubbels Ventures, filed a motion for dismissal of the complaint in the U.S. District Court for the District of Nebraska in July.

That motion claims Bayer's complaint contains no allegations directed at Gubbels.

On Monday, Bayer filed a motion in opposition to dismissal.

In particular, Bayer said it has proof AltEn was moving money to the other entities under its umbrella of companies, so as to avoid helping to pay for the cleanup at the plant.

"Defendant Tanner Shaw managed and/or ran the defendants' operations," Bayer said in a brief filed this week.

"Shaw is the individual at the center of a complex web of companies related to the AltEn facility in Mead, Nebraska, including Gubbels Ventures; the complex web of the defendant entities is set forth in the amended complaint.

"That the organizational structures of the companies are, presumably by design, impossible to determine and frequently change names and places of incorporation; that the defendants are grossly undercapitalized; that defendants are mere facades for the personal dealings of their owners and in disregard of the corporate entities; that defendants are the alter egos and the corporate veil should be pierced; and that funds were diverted from defendants for improper use."

Bayer said Integrated Recycling consists of a 50-50 business entity owned by E3 and Gubbels Ventures. Integrated Recycling was responsible for debagging, recycling and composting materials at the AltEn plant, Bayer said in its brief filed this week.

AltEn shut down its plant in early February 2021 after the Nebraska Department of Environment and Energy issued an emergency order to cease operations at the plant on Feb. 4 following numerous environmental violations. AltEn completed the shutdown on Feb. 8, 2021.

However, cold weather several days later led a pipe to burst at the plant, causing 4 million gallons of pesticide-filled water to flow downstream. The plant used pesticide-treated seed to produce ethanol, leaving behind at the plant site large volumes of distillers grains contaminated with neonicotinoids.

Back in February 2022, seed companies led by Bayer filed lawsuits against AltEn attempting to force the company to help pay for cleanup of the site. The companies have spent more than $28 million so far to conduct cleanup and the work continues.

In the motion to dismiss, Gubbels said Bayer has failed to show why the company was named in the amended complaint.

Bayer discounts the argument in its latest filing.

"Gubbels Ventures attempts to minimize the allegations made against it in the amended complaint by pointing to the number of times 'Gubbels' appears in the amended complaint," Bayer said.

"However, the crux of the amended complaint and the entirety of the litigation pending is that defendants' web of corporate entities and joint governance schemes along with their extensive promotion of their 'closed-loop' operational scheme support holding the related entities, including Gubbels Ventures, responsible for the environmental conditions at the site."

Bayer's amended complaint lays out what the company says were "several improper transfers of assets" giving rise to Bayer's legal action.

"AltEn has not contributed to the costs of stabilization at the AltEn facility but on information and belief AltEn has utilized contractors to prepare property and equipment for transfer and disposition," Bayer said in its brief this week.

"The evidence in discovery will show Gubbels Ventures and Integrated Recycling are certain contractors that received improper transfers from AltEn. Bayer need not prove the merits of its allegations at the pleading stage -- only that such fraudulent transfers exist under the statute entitling Bayer to relief."

Read more on DTN:

"Court Freezes Neb. Ethanol Plant Assets," https://www.dtnpf.com/…

"Mead Ethanol Plant Cleanup in New Phase," https://www.dtnpf.com/…

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

Follow him on Twitter @DTNeeley

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