Lender Seeks Lien on Ethanol from VeraSun

As bankruptcy unfolds some details remain to be worked out.

A leading lender to VeraSun Energy Corp., AgStar Financial, and three of its lenders are asking a bankruptcy judge to uphold its liens on ethanol transferred between VeraSun affiliates, according to a Dow Jones report.

AgStar claims the South Dakota ethanol maker violated its credit agreement when VeraSun transferred ethanol from its U.S. BioEnergy Corp. subsidiary to VeraSun Marketing. In court papers, AgStar claims VeraSun Marketing took ethanol from the U.S. Bio facility knowing it wouldn't be able to pay in full.

AgStar is also the debtor-in-possession financing arm for the VeraSun bankruptcy.

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