A Wichita-area maker of biodiesel and renewable diesel has filed Chapter 7 liquidation bankruptcy, with liabilities listed as between $10 million and $50 million.
WB Services, based in Sedgwick, is the parent company of Green Energy Products and Sedgwick Ventures. It operated a 2 million gallon per year biodiesel plant and a 3 million gallon per year renewable diesel facility, side by side in an industrial park south of the city of Sedgwick.
Sedgwick City Administrator Jaci Reimer said the site shut down a few months ago with no warning.
“One day they were working and the next day they were locked up and gone, and we’ve been trying to get answers ever since,” she said.
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A call to the company Friday went to voicemail and was not returned.
The Green Energy Products biodiesel plant had a large fire in July 2013. After firefighters from five jurisdictions battled the fire, the plant was a total loss, but there were no injuries.
Green Energy Products had been formed a year earlier when WB Services merged with Healy Biodiesel.
Reimer said the company sought industrial revenue bonds from the city to rebuild the biodiesel plant and add the renewable diesel plant. Any default on IRBs will not affect the town, she said.
Only WB Services is listed on the bankruptcy filing.
Wichita bankruptcy attorney William Zimmerman, who represents WB Services in the bankruptcy action, said the company declared bankruptcy April 28 immediately after receiving notice that a creditor had filed suit against it.
In a lawsuit filed earlier on April 28, American Warrior of Garden City said it was seeking the return of $5 million that it lent to Ronald Beemiller, majority owner of WB Services, on April 1, 2015.
American Warrior’s owner Cecil O’Brate filed a second suit against WB Services, Green Energy Products and Sedgwick Ventures that day. In that suit, O’Brate said that the companies entered into a $14 million loan refinancing transaction on Feb. 1 with Bank SNB, but it used as collateral money already owed to American Warrior.
In the suit, O’Brate contends that the companies owe $350,000 to their employees in wages and $1 million to the federal government in withholding tax.
Zimmerman said the bankruptcy will allow the bankruptcy trustee to claw back some of the money paid to creditors who were paid with the February refinancing.
“There are significant tax liabilities,” he said. “And it may also mean the final payroll can be paid … this allows some equalization.”