VeraSun Files For Chapter 11 Bankruptcy Protection

November 1, 2008 3:34 p.m. EST

Sioux Falls, S.D. (AHN) - VeraSun Energy Corp., the country's third largest producer of ethanol, announced late Friday that it is filing for Chapter 11 bankruptcy protection.

The filing was triggered by "a series of events that led to a contraction in VeraSun's liquidity, impairing its ability to operate its business and invest in production facilities," according to a company statement.

VeraSun said that it expects to continue normal operations, pay employees regular salaries, purchase raw materials especially corn and pay suppliers while the company reorganizes.

The biofuel firm suffered huge losses as grain prices reached record highs combined with the financial and economic crisis.

It will work with banks to secure "additional committed financing to provide adequate liquidity to fund operations in the normal course."

VeraSun's Aurora refinery produces 100 million gallons of ethanol annually.