Global Clean Energy Holdings, Inc. (GCEH) and its subsidiaries filed for Chapter 11 bankruptcy protection in Texas on Tuesday, seeking to implement a pre-negotiated $2.1 billion restructuring plan that would allow the renewable fuels producer to continue operations. The company, which operates a vertically integrated "farm-to-fuel" business model, cited construction delays, cost overruns at its Bakersfield Facility, and regulatory uncertainty in the renewable fuels market as key factors driving its financial distress.
The bankruptcy filing comes just months after the company's Bakersfield, California renewable diesel facility finally became operational in December 2024, nearly three years behind schedule. The filing in the Southern District of Texas Bankruptcy Court (Case No. 25-90113) includes a restructuring plan already supported by key creditors, including term loan lenders and the company's engineering contractor.
"Despite the Company's success in expanding its renewable energy business and streamlining operations, Global Clean has been negatively impacted by persistent delays and cost overruns in the construction of the Bakersfield Facility, as well as operational challenges facing the green energy industry as a whole," the company stated in its disclosure statement.
Global Clean Energy Holdings develops and produces ultra-low carbon renewable fuels using Camelina sativa, a versatile oilseed that doesn't compete with food crops. The company owns what it describes as the world's largest portfolio of proprietary Camelina varieties and partners with approximately 500 growers worldwide who cultivate over 124,000 acres of the crop. Its recently completed Bakersfield Facility converts this and other feedstock into renewable diesel that can reduce emissions by up to 85% compared to conventional fossil fuels.
According to the filing, the company has approximately $2.1 billion in total potential claims, including $1.1 billion in secured debt and $958.5 million in facility-related claims. Much of this debt stems from the troubled development of the Bakersfield Facility, which was originally scheduled for completion in January 2022 but faced numerous setbacks.
A central issue in the bankruptcy is the company's dispute with CTCI Americas, Inc., the engineering services contractor hired in May 2021 to complete the Bakersfield project. The disclosure statement reveals that CTCI has claimed approximately $949.3 million in unpaid obligations and filed a mechanic's lien against the facility. The proposed restructuring includes a settlement of this dispute, with CTCI receiving a portion of takeback debt and 55.6% of new preferred equity.
"Resolution of this potentially protracted litigation, the Debtors' restructured balance sheet that will provide the Company greater operational breathing room, and the potential improved optimization and debottlenecking at the Bakersfield Facility toward increased RD production will position Global Clean well for the future," the company stated in the filing.
The proposed restructuring plan calls for the company's main secured lenders, led by Orion Infrastructure Capital, to receive their pro rata share of takeback debt, 44.4% of new preferred equity, and 100% of new common equity. Vitol, a global trading firm that supplies feedstock to the Bakersfield Facility and purchases its renewable diesel output, would convert its revolving credit facility claims into a new exit facility.
Noah Verleun, Global Clean's Chief Executive Officer, signed the filing, which notes that the plan has support from creditors holding 100% of the company's revolving credit facility claims, 96% of term loan claims, and 100% of the engineering contractor claims.
The company pointed to macroeconomic factors as additional challenges, including high interest rates, inflation, and especially regulatory uncertainty. The December 31, 2024 expiration of the Biodiesel Blenders' Tax Credit and its replacement with the Section 45Z Clean Fuel Production Tax Credit created what the company described as "significant trepidation and massive disruption in the industry."
As part of the bankruptcy process, Global Clean has secured commitments for debtor-in-possession financing, including a $100 million revolving credit facility from Vitol, a $75 million term loan facility, and a $75 million payment facility from CTCI.
The proposed timeline calls for a confirmation hearing on July 1, 2025, with plan effectiveness expected within 120 days of the filing date. The company's legal representation includes Kirkland & Ellis LLP and Norton Rose Fulbright US LLP as co-counsel.
Despite its financial troubles, the Bakersfield Facility has produced approximately 450,000 barrels of renewable diesel since commencing operations in December, generating about $26 million in revenue in 2024. The company projects this figure to rise to $560 million in 2025, provided the restructuring allows operations to continue unimpeded.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 421 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.