Earth Energy Renewables developed its IP from research at the University of Texas Austin to produce bio-mass chemicals and fuel from organic waste, e.g., that waste from specific industrial food processes yielded the best results.

The investors sold the IP to a management team that attempted to raise $50 million for commercial manufacturing. Over the years, several parties contributed capital and progress payments, but in the end, management could not raise sustainable capital.

Events Leading to Bankruptcy: Lack of cash caused EER to file for Chapter 11 in the Western District of Texas – San Antonio Division on October 20, 2020. Subchapter V Trustee (Case No. 20-51780-RBK).

The court removed senior management for self-dealing, and a Subchapter V Trustee took over leading the case.

The Debtors received sufficient cash from the Department of Energy on its biomass fuels to operate the case.

During the case, several potential bidders attempted to poach key employees with knowledge of the technologies and the science.

Efficient Process: a stalking horse bidder emerged at $15 million.

• Manning reached out to over 1,200 strategic and financial bidders.

• Despite an auction where the stalking horse bidder prevailed, at the request of several large credits, the previous senior management was given another 60 days to find financing for a plan over a sale. This decision was against the investment bankers' recommendation and advice.

• They failed to raise additional capital.

• The stalking horse bidder lowered its bid to $10 million, and the court finally approved the sale.