OMAHA — Since forming the AltEn Facility Response Group in 2021, the six seed companies that once supplied the ethanol plant with discarded or unused seed have spent $28 million to clean up the site.
The millions of dollars paid to date has been done so voluntarily, Omaha attorney Stephen Bruckner told a federal judge Friday, while AltEn, the company responsible for the “severe environmental harm” near Mead, has avoided shouldering any of the cost.
Bruckner, speaking on behalf of Syngenta, Corteva, AgReliant, Bayer, Beck’s Superior Hybrids and Winfield Solutions, said the ethanol plant that once turned pesticide-treated seed into biofuel had taken active steps to sell off and hide assets.
“We’re here to recover what we’ve had to pay,” Bruckner told U.S. District Court Judge Brian Buescher during a 3-hour hearing at the Roman Hruska Federal Courthouse.
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AltEn shut down in February 2021 at the order of the Nebraska Department of Environment and Energy following numerous violations of state environmental regulations dating back to 2015, when it first went into operation.
The seed companies sued AltEn and several other companies that operated at the same location, as well as individuals who oversaw the ethanol plant’s operations, in early 2022 seeking compensation for costs paid, as well as damages.
But Friday, the seed companies were in court to ask Buescher to freeze the assets of a company not named in the original lawsuit — Earth Environment & Energy LLC, better known as E3 — which they said was being used to avoid paying remediation costs.
During oral arguments, Bruckner said that despite not being in operation for nearly two years and laying off 60-plus people, AltEn is continuing to pay four employees “six-figure salaries” for jobs not related to the cleanup out of a Wells Fargo bank account controlled by E3.
Bruckner said the seed companies believed the money in E3’s account came from the sale of Mead Cattle Co. — a sale they objected to at the time — and that AltEn was intentionally burning through cash at an unsustainable rate.
In October 2021, there was some $2.9 million in that account, according to financial records provided to the seed companies during discovery, while that amount was down to nearly $1.8 million in October 2022.
With a monthly cash burn rate estimated at $136,000 — Bruckner said that money was used to pay AltEn’s chief financial officer, a financial adviser, and accountant — the account will likely be depleted by the end of this year if the court did not take action.
Joe Wilkins, a Lincoln attorney representing AltEn, said the money from selling the feedlot was not for the seed companies to take. E3, which owned Mead Cattle Co. until its sale to Champion Feeders of Texas in 2021, received those profits and was able to use them as it saw fit.
E3 transferring money into the AltEn Operating Co., a separate LLC used to pay the ethanol company’s employees, was part of normal corporate operations and recorded in financial transactions, Wilkins said.
“If it was our intent to hide money or conceal it, we’ve done a terrible job,” he said.
The employees remaining on site are crucial to wrapping up the shuttered ethanol plant’s remaining operations while also meeting the obligations required by the state through several permits granted to manage wastewater and stormwater collected on site.
The state of Nebraska, through an amicus brief filed last week, has asked Buescher not to freeze any assets AltEn needs to keep its permits in order for the environmental cleanup to continue.
“They are doing something, which is why the state of Nebraska is asking they continue to do something,” Wilkins said.
Plus, the troubled ethanol plant’s attorney said, the seed companies had a contract with AltEn, not with any of its parent or sibling entities. He asked Buescher to not lump AltEn together with E3, the AltEn Operating Co., Mead Cattle Co. or Green Recycling LLC, which operated a biochar plant at the site.
That led to a pointed back-and-forth between Buescher and Wilkins, with the judge asking if E3 bore any obligation to remediate the site or pay for the cost of doing so.
Wilkins said that legally speaking, E3 didn’t. Nor did Mead Cattle Co., which supplied AltEn with manure but had no control over what the ethanol plant did with it, or any other company that wasn’t AltEn.
Bruckner, in a rebuttal, said the seed companies weren’t legally obligated to conduct a cleanup of AltEn either, and were only doing so at the request of the state, as well as the Environmental Protection Agency.
He described E3 as the central hub that got to decide where to funnel money and when.
“We’re asking this court to jump in and address that, to stop the bleeding, stop the dissipation and help us turn this around and use funds to get this remediated,” Bruckner said.
Buescher, a former litigator for agribusinesses, took the case under advisement Friday and signaled he could issue an order on the injunction as early as next week.
The judge said he was considering a proposal from the seed companies to limit the number of people still employed by AltEn to only those necessary to comply with the permits and a consent degree with the state.
He also said he was likely to limit how much money E3 could pay to keep AltEn’s operations going — an amount that would be determined through negotiations by both parties.
But, Buescher said any amount of E3’s assets granted to the seed companies would fall far short of what the coalition has paid so far and will likely pay in the future for the cleanup.
“That’s a tiny fraction of what this is going to cost,” he said.
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