On March 17, 2015, following the lead of Quicksilver Resources Inc., USA Synthetic Fuel Corporation filed its own voluntary chapter 11 case in Delaware.  A copy of the petition is here.  The case is docketed as case no. 15-10599, and has been assigned to The Honorable Mary F. Walrath.

The Declaration of Dr. Steven C. Vick was filed in support of the petition and other first-day motions.  Dr. Vick is the CEO and President of USA Synthetic Fuel Corporation.  According to the Vick Declaration, “The Debtors are an environmentally focused, development state energy company pursuing low-cost, clean energy solutions through the deployment of proven Ultra Clean Btu Converter technology.”  The technology converts lower-value solid hydrocarbons, such as coal, into higher-value energy products.

Dr. Vick states in the declaration that in 2012 the debtors obtained approximately $36.6 million in aggregate principal amount of secured debt financing, and used those funds to procure land and other materials for ultimate construction of an Ultra Clean Btu Converter in Lima, Ohio.

Efforts to lauch a $700 million bond and equity offering were cancelled when the Debtors failed to make certain payments under their prepetition secured indebtedness as a result of liquidity issues, mounting liabilities to employees, tax authorities, professional advisors, an appraisal of a Coal Asset, and an SEC investigation into certain accounting practices and internal controls.

In August 2014, the Debtors received a term sheet from their prepetition secured lenders which suggested a transaction in which the lenders would purchase substantially all the assets of the debtors in a bankruptcy 363 sale.  By March 2015, the debtors had found no viable alternative to the proposed transaction.  As a result, the debtors have entered bankruptcy with the purpose of auctioning their assets off with the prepetition lenders acting as the stalking horse.