KiOR Biofuels: Take the Money and Run

Here’s a story about a billionaire investor and a bankrupt biofuel company with nothing better to do than bilk Mississippi taxpayers. From the Associated Press (via Fuel Fix):

It’s the latest turn in what’s becoming a nasty legal fight between Mississippi and KiOR, which state leaders once hailed as an economic boon for the state. [Mississippi Development Authority] at first cooperated with KiOR’s attempts to reorganize in hopes of maximizing how much money the state could collect from the sale of KiOR’s defunct Columbus refinery. But MDA and KiOR have become increasingly confrontational after the company filed for bankruptcy. MDA is deposing Khosla and others, and KiOR says it and others have turned over hundreds of thousands of pages of documents to MDA lawyers.

KiOR is backed by noted Obama donor Vinod Khosla. His investment in KiOR’s Columbus, Mississippi biofuel facility just hasn’t paid off, leaving taxpayers on the hook. Back in 2013 KiOR touted it’s first shipment of biofuels after three years of outright failure to produce fuel in any meaningful quantity. KiOR’s struggles continued as the company “missed” a $1.8 million loan payment, forcing it to pay $312 million immediately, all while producing almost no product. Finally, last year the company declared bankruptcy a mere seven years after its launch.

Biofuel production of cellulosic biofuel industry

After KiOR declared bankruptcy, the MDA came to its senses and is now aggressively pursuing the taxpayer money it loaned the failed biofuel company. The Associated Press continues:

MDA, though, says KiOR’s attempts to refine biofuels are a failure with no immediate prospects of commercial production. The state says KiOR has no real business prospects and that the court should pull the plug.

The state says KiOR’s Mississippi subsidiary, which hasn’t declared bankruptcy, owes it $79 million. But because MDA doesn’t have a mortgage on the assets of the parent company, it could get no money back in the bankruptcy.

KiOR says it won’t pay up as a result of “MDA’s hyper-aggressive litigation scheme.”

KiOR was once touted as the future of the transportation fuels industry. Now the company is bankrupt and has “no immediate prospects of commercial production.” Hopefully the MDA will recover at least some of the taxpayer money it gave away.