by Timothy McQuiston, Vermont Business Magazine A Brattleboro company that sought to grow vegetables, make bio-diesel and raise fish from the power generated by a closed landfill filed for Chapter 7 bankruptcy last week. Creditors met on Friday, April 26. The only operating part of the Brattleboro business as of today is the methane, resource-recovery electric facility. Both private and public investors lost money, but to what extent will not be known until the final bankruptcy court ruling in a couple of months.
The company basically ran out of money in October, said Steve Magowan, who is serving as president since founder and former president Don McCormick resigned in January.
Magowan was appointed president and represents a private investor. He said he does not expect to get any investor money back. He said it was a risky equity investment to begin with. He said the methane plant is only producing $11,000-$12,000 in revenues a month and could not support what seemed like a good idea at the time.
The idea behind Carbon Harvest, founded in 2009 (under various LLCs, see bankruptcy filings below), was to use the energy and heat produced by the methane plant at the former Brattleboro landfill off Ferry Road to power and heat a greenhouse, a tilapia fish farm, which operated out of the old Book Press building off Putney Road, and a bio-diesel facility using byproducts of the other operations to grow algae. The secondary operations were closed last fall.
Vermont Development Secretary Lawrence Miller said that while a lot of money was earmarked for the various projects, not all of it was distributed.
For instance, according to Miller, the Vermont Economic Progress Council authorized VEGI incentives totaling $569,000 for Carbon Harvest/Carbon Harvest Brattleboro. But in December 2012, VEPC staff received an email from Don McCormick stating that CH must reorganize, will not complete the Brattleboro project, and was choosing to not complete the necessary filings to complete their 2011 VEGI (Vermont Employment Growth Incentives) claim (they had filed an incomplete claim).
VEPC voted to terminate the incentives on December 13, 2012. The VEGI money was thus never distributed.
Nor was the Vermont Community Development Program grant of $325,000 to the Town of Brattleboro for a loan to Carbon Harvest that was announced in July 2012. The funding has been re-allocated to other projects, according to Miller.
The Vermont Economic Development Association did loan the project $360,000. Director Jo Bradley said she expects to get at least most of the money back through either ongoing operations of the electric generating facility or through its sale. She said all of that is still in process.
It was a very interesting and innovative project, Bradley said.
Like others who had high hopes for the project, she said, It was undercapitalized and a very complicated business to operate, Bradley said.
Vermont Agricultural Credit Corp ($450,000) is also listed as a creditor.
Miller said, The issue, as I understand it, is that they had gone along fairly well the (electric) facility at the landfill down in Brattleboro but that they had gone on with other projects and over-extended operationally.
He said the renewable energy market was not robust enough to support the entire operation.
Adding the fish component to the methane generation project added complexity to the operation, Miller said.
From a research point of view, he said, they moved the needle.
Ellen Kahler, Executive Director of the Vermont Sustainable Jobs Fund, said the VSJF provided $215,000 for the algae/bio-diesel component, which will be completed by the end of April. The VSJF wanted to make sure that the research got completed after the business failed.
The money was funded through the US Department of Energy. A YouTube video of the research can be found at VIDEO, (with the Carbon Harvest piece at about the 6:30 minute mark). Carbon Harvest was required to come up with a 20 percent match, Kahler said.
We thought this was really going to be an important project for us, she said, so she wanted to see the research part of it completed, which she said has been valuable.
We wanted to salvage what we could salvage out of it, Kahler said.
The Brattleboro Reformer ran a story last October which provided a warning shot to investors. SEE STORY
It said Carbon Harvest, whose parent company is in Burlington, was forced to furlough six of its 11 workers in Brattleboro, President Don McCormick disclosed.
Neither McCormick nor another early proponent of Carbon Harvest, Will Raap, immediately returned phone messages to Vermont Business Magazine.
Raap is the founder of Gardeners Supply, which is based in Burlingtons interval. Carbon Harvests corporate office is located just down the street.
On Raaps website www.willraap.org, he states: I have spent my career thinking globally and acting locally by building and helping to launch businesses like Gardeners Supply, Intervale Center, Seventh Generation, Living Technologies, and Carbon Harvest Energy.
The Reformer quoted McCormick as saying last October rumors of Carbon Harvest's closure are greatly exaggerated."
But outside the algae research continued by the VSJF, all the secondary operations were closed last fall and by the following January McCormick had resigned.
And what about the tilapia?
Magowan said, The fish got composted.
BANKRUPTCY FILINGS
TITLE
ASSETS
LIABILITIES
ST
CH
FILED
Carbon Harvest Energy, LLC
$0-$50k
$1M-$10M
VT
7
Apr 23
Carbon Harvest Algae, LLC
$0-$50k
$1M-$10M
VT
7
Apr 23
Brattleboro Carbon Harvest LLC
$1M-$10M
$1M-$10M
VT
7
Apr 23
Carbon Harvest Investments LLC
$0-$50k
$1M-$10M
VT
7
Apr 23
Lebanon Carbon Harvest LLC
$1M-$10M
$1M-$10M
VT
7
Apr 23
Brattleboro Carbon Harvest LLC
Court
Vermont Bankruptcy Court
Case number
5:13-bk-10302
Assets
$1,000,001 to $10 million
Liabilities
$1,000,001 to $10 million
Judge
Colleen A. Brown
Chapter
7
Filed
Apr 23, 2013
Type
voluntary
Updated
Apr 26, 2013
Last checked
Apr 26, 2013
Debtor
Brattleboro Carbon Harvest LLC
130 Intervale Road
Burlington, VT 05401
CHITTENDEN-VT
Tax ID / EIN: xx-xxx9913
Represented By
Raymond J Obuchowski
PO Box 60
1542 Vt. Rt. 107
Bethel, VT 05032-0060
(802) 234-6244
Fax : (802) 234-6245
Email: [email protected]
Trustee
Douglas J. Wolinsky
PO Box 1489
Burlington, VT 05402-1489
(802) 864-0880
Carbon Harvest Energy, LLC
Court
Vermont Bankruptcy Court
Case number
5:13-bk-10300
Assets
$0 to $50,000
Liabilities
$1,000,001 to $10 million
Judge
Colleen A. Brown
Chapter
7
Filed
Apr 23, 2013
Type
voluntary
Updated
Apr 26, 2013
Last checked
Apr 26, 2013
Debtor
Carbon Harvest Energy, LLC
130 Intervale Road
Burlington, VT 05401
CHITTENDEN-VT
Tax ID / EIN: xx-xxx0195
Carbon Harvest Algae, LLC
Court
Vermont Bankruptcy Court
Case number
5:13-bk-10301
Assets
$0 to $50,000
Liabilities
$1,000,001 to $10 million
Judge
Colleen A. Brown
Chapter
7
Filed
Apr 23, 2013
Type
voluntary
Updated
Apr 26, 2013
Last checked
Apr 26, 2013
Debtor
Carbon Harvest Algae, LLC
130 Intervale Road
Burlington, VT 05401
CHITTENDEN-VT
Carbon Harvest Investments LLC
Court
Vermont Bankruptcy Court
Case number
5:13-bk-10304
Assets
$0 to $50,000
Liabilities
$1,000,001 to $10 million
Judge
Colleen A. Brown
Chapter
7
Filed
Apr 23, 2013
Type
voluntary
Updated
Apr 26, 2013
Last checked
Apr 26, 2013
Debtor
Carbon Harvest Investments LLC
130 Intervale Road
Burlington, VT 05401
CHITTENDEN-VT
Lebanon Carbon Harvest LLC
Court
Vermont Bankruptcy Court
Case number
5:13-bk-10305
Assets
$1,000,001 to $10 million
Liabilities
$1,000,001 to $10 million
Judge
Colleen A. Brown
Chapter
7
Filed
Apr 23, 2013
Type
voluntary
Updated
Apr 26, 2013
Last checked
Apr 26, 2013
Debtor
Lebanon Carbon Harvest LLC
130 Intervale Road
Burlington, VT 05401
CHITTENDEN-VT
Tax ID / EIN: xx-xxx0797