Mississippi Biofuel Case: $4.5M For Investors Under Federal Settlement

A federal judge has approved a $4.5 million settlement for private shareholders of failed biofuel maker KiOR, and a lawsuit by the state of Mississippi seeking to recover a much larger amount continues. U.S. District Judge Lee Rosenthal issued the order Monday in Houston approving the settlement, intended to partially compensate 23,000 shareholders for money […]

A federal judge has approved a $4.5 million settlement for private shareholders of failed biofuel maker KiOR, and a lawsuit by the state of Mississippi seeking to recover a much larger amount continues.

U.S. District Judge Lee Rosenthal issued the order Monday in Houston approving the settlement, intended to partially compensate 23,000 shareholders for money they lost because of decreases in KiOR’s stock price.

The successor company to KiOR and former KiOR CEO Fred Cannon are to pay the money under the settlement. Lawyers are to receive $1.5 million of the $4.5 million, plus expenses.

Separately, Mississippi Attorney General Jim Hood is suing Cannon, former lead investor Vinod Khosla and others in state court in Jackson, demanding repayment of $77 million, plus interest. Mississippi loaned $75 million to KiOR, which built a biofuel plant in Columbus. The plant was supposed to convert wood chips into a synthetic crude oil using a special chemical at high temperature and pressure. The plant made some biocrude in 2012 and 2013, but not nearly as much as it was designed for.

Cannon and the company that Khosla reorganized to succeed KiOR after it filed for bankruptcy in 2014 paid a $100,000 fine to the Securities and Exchange Commission last year to settle allegations that the company misled investors about how much biocrude the company was able to make from wood. Components from the $230 million plant have since been sold to two other renewable fuel companies for $2.7 million.

From the Miami Herald: http://www.miamiherald.com/news/business/article155482079.html

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