Fulcrum BioEnergy: $456M Debt and Nevada Biorefinery Sale

Fulcrum BioEnergy, a Pleasanton, California-based waste-to-fuel company, filed chapter 11 on September 9, 2024 in the U.S. Bankruptcy Court, District of Delaware. Public reporting said the company had obligations to more than 200 creditors totaling over $456 million.

The filing followed the shutdown of the Sierra BioFuels Plant near Reno, Nevada, which stopped operating in mid-May 2024 after equipment problems. The plant began operations in late 2022 and was designed to convert 219,000 metric tons of garbage per year into synthetic crude oil. Reports cited clogging that damaged equipment, nitric acid formation that corroded equipment, and sludge buildup.

The chapter 11 process centered on a court-supervised sale. Switch Ltd. provided a $5 million DIP loan and submitted a stalking horse bid of $15 million, and the November 2024 auction resulted in Switch acquiring the biorefinery and a WM subsidiary purchasing the feedstock processing facility. The plan of liquidation was confirmed in April 2025 and became effective in May 2025, creating a liquidation trust to administer remaining assets and claims.

What has changed in Fulcrum BioEnergy, Inc. since this article was published?

View case

Debtor(s)	Fulcrum BioEnergy, Inc.; Fulcrum Sierra BioFuels, LLC; Fulcrum Sierra Finance Company, LLC; Fulcrum Sierra Holdings, LLC
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-12008
Judge	Hon. Thomas M. Horan
Petition Date	September 9, 2024
Confirmation Date	April 14, 2025
Effective Date	May 5, 2025
Plan Type	Plan of liquidation with a liquidation trust
Reported Obligations	More than $456 million
Reported Equity Raised	More than $500 million
Nevada Bond Support	About $290 million in environmental improvement revenue bonds
DIP Facility	$5 million from Switch Ltd.
Stalking Horse Bid	$15 million from Switch Ltd.
Biorefinery Sale Buyer	Switch Ltd.
Feedstock Sale Buyer	Refuse, Inc. (WM subsidiary)
Liquidation Trustee	Wilmington Savings Fund Society, FSB

363 Sale Process and Liquidation Plan

DIP financing and cash collateral. The DIP Motion described a facility of up to $5 million, with $3,204,103 stated as available on an interim basis and a 10% PIK interest rate that capitalized monthly. The DIP note matured at the earliest of 80 days after the petition date, 30 days after the petition date if a final order was not entered, a sale closing, substantial consummation of a plan, or acceleration of the DIP note. Milestones called for a motion to approve bidding procedures within two days, an interim order within three days, a bidding procedures order within 30 days, a final DIP order within 30 days, an auction within 60 days, a sale approval order within 65 days, and a sale closing within 80 days.

Budgeting used a rolling 13-week forecast with a 15% permitted variance for disbursements and receipts and a biweekly budget submission cadence. The Final DIP Order granted priming DIP liens over certain prepetition bond liens and provided adequate protection liens and claims, subject to a carve-out for statutory fees, a $25,000 chapter 7 trustee carve-out, and a $250,000 post-trigger professional fee cap. Termination events included milestone failures, conversion to chapter 7, appointment of a trustee or examiner, and environmental diligence outcomes tied to a Phase II assessment and purchase price adjustment concepts.

An Amended Final DIP Order added a Prepetition Lender Estate Fund Carveout funded from BioFuels sale proceeds equal to 16% of the excess distributed to BioFuels bondholders above $15.6 million, with 25% of that carveout payable to the committee's investment banker if its work produced a successful or back-up bidder. The same provision referenced a $50,000 initial broker fee and an additional $92,500 for committee professionals. The amended order also provided that BioFuels bondholders could vote unsecured deficiency claims but would not receive plan or trust distributions on account of those deficiency claims, while guarantee claims against Fulcrum BioEnergy, Inc. were not limited.

Sale process and asset dispositions. The court entered a Bidding Procedures Order in October 2024, designating Switch as stalking horse bidder, set a November 4 bid deadline, a November 7 auction, and a November 12 sale hearing. The Sale Motion described stalking horse terms including a $600,000 break-up fee, a $1,500,000 good faith deposit, and a $250,000 minimum bid increment. DSI marketed the assets, including the biorefinery, a feedstock processing facility on 10 acres, agreements with NV Energy and local water suppliers, and a portfolio of U.S. and international patents, along with equity in UK-based subsidiaries.

The auction ran 57 rounds, and the successful bids were $55 million for the biorefinery assets and $3 million for the feedstock processing facility. The Biorefinery Sale Order allowed Switch to credit bid DIP obligations of $5,073,551.95 and directed cash proceeds to a segregated account for prepetition BioFuels bond obligations. The Feedstock Sale Order included typical section 363(m) good-faith findings. Other transactions included a $900,000 Catalyst Sale to Johnson Matthey, a $10 million Agent Credit Bid Sale of parent assets to the prepetition agent against a claim of at least $112,058,488, and a $325,000 UK Share Sale to Northpointe Energy, with proceeds applied to the agent claim before distributions under the plan. The Disclosure Statement characterized the credit bid sale as a 9% recovery for Class 2A holders.

Case timeline (selected).

Date	Event
2024-09-10	chapter 11 petitions filed
2024-09-11	First day declaration filed
2024-09-11	DIP financing motion filed
2024-09-12	Interim DIP/cash collateral order entered
2024-10-10	Final DIP/cash collateral order entered
2024-10-11	Bidding procedures order entered
2024-10-16	Amended final DIP/cash collateral order entered
2024-11-07	Auction held
2024-11-14	Biorefinery and feedstock sales approved
2025-01-15	Catalyst sale approved ($900,000)
2025-01-17	Agent credit bid sale order entered ($10 million)
2025-02-03	Disclosure statement filed
2025-04-14	Plan confirmed
2025-04-24	UK subsidiary share sale approved ($325,000)
2025-05-05	Effective date occurred
2025-10-27	Motion to extend claim objection deadline filed
2025-11-10	Claims and noticing agent changed

Plan confirmation and liquidation trust. The court's Confirmation Order confirmed a Plan of Liquidation on April 14, 2025, and the plan became effective May 5, 2025, establishing a liquidation trust administered by Wilmington Savings Fund Society, FSB. The liquidation trustee was selected by the committee in consultation with the debtors, the BioFuels trustee, and the prepetition agent. The Plan Supplement transferred remaining assets and causes of action to the trust for the benefit of liquidation trust beneficiaries, who are treated as grantors and deemed owners of the trust assets for federal income tax purposes.

The trust may establish a disputed claim reserve for each disputed claim, funded from liquidation trust assets in an amount that approximates the distribution that would be made if the claim were allowed. The trustee can distribute the allowed portion while reserving the disputed portion and can withhold distributions while deciding whether to object to claims. The trust agreement grants the trustee broad authority to administer the wind-down and pursue causes of action, provides that the trustee is entitled to compensation and reimbursement of reasonable documented expenses from trust assets without prior bankruptcy court approval, and requires notice and an opportunity to object for settlements resulting in an allowed claim over $2 million.

Allowed administrative expense claims (excluding fee claims) are payable in cash after the later of allowance and the effective date, subject to an administrative expense claims bar date. The plan funded a professional fees account on the effective date and required fee estimates five days before the anticipated effective date, with final fee applications due 45 days after the effective date and objections generally due 20 days after filing. Priority tax claims can be paid in a lump sum or in installments with section 511 interest over up to five years from the petition date. The liquidation trustee directs the initial distribution date and subsequent distributions, with minimum distribution thresholds for small claims.

The disclosure statement provided estimated recoveries for certain classes, with many listed as unknown because recoveries depend on liquidation trust monetization and final distributable cash.

Class	Estimated allowed amount	High-level treatment
Class 1 (Other Priority Claims)	$15,342	Cash after effective date and allowance
Class 2A (Fulcrum prepetition loan secured)	$102,058,488	Collateral/proceeds and liquidation trust proceeds, with first $1.1 million redirected to Class 4A
Class 2B (Holdings bond secured)	$113,955,468	Delivery of remaining collateral not otherwise released
Class 2C (BioFuels bond secured)	$127,616,691	Delivery of remaining collateral not otherwise released
Class 3A (Fulcrum deficiency)	N/A	Pro rata share of cash, if any, from the Fulcrum liquidation trust account
Class 3B (Holdings deficiency)	$113,955,468	Pro rata share of cash, if any, from the Holdings liquidation trust account
Class 3C (BioFuels deficiency)	$124,710,200	Waives distributions
Class 4A (Fulcrum undersecured/GUC)	$93,863,401	Pro rata share of cash, if any, from the Fulcrum liquidation trust account
Class 4B (Holdings undersecured/GUC)	N/A	Pro rata share of cash, if any, from the Holdings liquidation trust account
Class 4C (BioFuels undersecured/GUC)	$80,863,858	Pro rata share of cash, if any, from the BioFuels liquidation trust account
Class 5 (Interests)	N/A	Cancelled on effective date

Class 3C treatment tied to the amended DIP order, which allowed BioFuels bondholders to vote deficiency claims but barred distributions on account of those deficiency claims.

Release and exculpation mechanics. The plan used a voluntary release opt-out mechanism for voting classes that required parties to check an opt-out box on their ballots to avoid granting releases. The confirmation order approved the release, exculpation, and injunction provisions as binding after notice and an opportunity to opt out.

Confirmation order and post-effective administration. The confirmation order dissolved the creditors' committee on the effective date, made the order immediately enforceable upon entry, and required reserves for Abengoa-related claims using the face amounts listed for Classes 4A and 4C. The liquidation trust moved to extend the claims objection deadline from November 3, 2025 to May 4, 2026, and the court granted the extension.

Claims and noticing agent. Kurtzman Carson Consultants, LLC dba Verita Global served as claims and noticing agent at the start of the cases. A November 2025 order terminated Verita and appointed Donlin, Recano & Company, LLC to maintain the claims register and provide noticing services.

Waste-to-Fuel Process and Plant Shutdown

Business and plant profile. Fulcrum was founded in 2007, and the First Day Declaration describes a process that used gasification and Fischer-Tropsch technologies to convert municipal solid waste into drop-in fuels. Press releases described products that included low-carbon transportation fuels such as sustainable aviation fuel and renewable diesel. The Sierra BioFuels Plant near Reno launched in 2022, received landfill waste, and converted it to synthetic crude oil sent to Marathon Petroleum for refining. Bioenergy Insight described the Nevada site as the first commercial waste-to-sustainable fuel facility in the U.S. and said the company was backed by Waste Management and Marathon Petroleum. The Chemical Engineer reported the facility had a target of about 42 million liters of synthetic crude oil per year and said a February 2023 railcar shipment contained about 350 gallons. SAF Investor described the Nevada facility as the world's first site to convert landfill waste into renewable transportation fuels.

Debtor structure. The chapter 11 cases covered four U.S. entities: Fulcrum BioEnergy, Inc.; Fulcrum Sierra BioFuels, LLC; Fulcrum Sierra Finance Company, LLC; Fulcrum Sierra Holdings, LLC. The First Day Declaration said the parent owned 13 subsidiaries (nine U.S. entities and four international entities), and the international entities did not file and were not obligors on the funded debt.

Operations and shutdown. The plant shut down in mid-May 2024 and the company laid off most of its approximately 120 employees. Bioenergy Insight reported the company terminated all 100 factory employees in May 2024. Reports said a first production run caused extensive damage and the facility faced clogging issues, nitric acid corrosion, and sludge accumulation. Nevada regulators issued stop-work orders in March 2024 and issued permits in September 2023 and March 2024. Argus reported the company faced equipment changes, supply chain delays, and declining environmental credit prices. The company said it had ceased operations by June 2024.

Airline Investors and Expansion Projects

Fulcrum operated for 13 years while raising over $500 million, with investors that included airBP, United Airlines, Japan Airlines, and SK Group. United committed a $30 million equity investment and a supply agreement for at least 90 million gallons of sustainable aviation fuel per year over 10 years. Cathay Pacific became the first airline investor in 2014 and signed a 375 million gallon, 10-year offtake agreement. Chemical & Engineering News reported that SK Group halted investment at the end of 2023 when new leadership took over.

Argus reported offtake agreements with BP and United Airlines and plans for facilities in Indiana, the U.S. Gulf Coast, and the UK with potential capacity of about 400 million gallons annually. Bond Buyer reported the Gary, Indiana project was expected to use up to $500 million in tax-exempt bonds. Local reporting said the project promised $600 million in investment and 160 jobs, while a community group challenged the permits and U.S. senators asked the IRS to exclude plastics-to-fuel projects from Inflation Reduction Act credits.

Bond Default and Prepetition Capital Structure

The Nevada project was financed through about $290 million in environmental improvement revenue bonds issued from 2017 to 2020, with UMB Bank as trustee. Bond Buyer reported the bonds were 30-year instruments without credit ratings and that UMB demanded accelerated repayment after a default. The company first missed a monthly payment in August 2023 before entering a forbearance agreement on October 25, 2023. The Nevada plant cost more than $200 million to build.

The First Day Declaration reported about $456.6 million of prepetition funded indebtedness just before the petition date. The declaration said unsecured convertible notes were largely converted into preferred stock on December 31, 2023, leaving a smaller remaining unsecured note. The parent term loan matured December 23, 2023 and the debtors received a bond default notice and acceleration on October 16, 2023. After more than six months in forbearance, the debtors said they lost funding for continued operations and maintenance at the Sierra plant in early May 2024.

Instrument	Borrower	Outstanding principal (approx.)	Notes
Parent prepetition term loan facility	Fulcrum BioEnergy, Inc.	$90,500,000	First lien on substantially all assets of the parent and certain subsidiary guarantors
Parent secured convertible promissory notes (aggregate)	Fulcrum BioEnergy, Inc.	$64,500,000	First lien subject to term loan priority
Parent unsecured convertible promissory note (Rustic Canyon)	Fulcrum BioEnergy, Inc.	$5,000,000	Unsecured, still outstanding
Sierra BioFuels term loan facility	Fulcrum Sierra BioFuels, LLC	$39,774,423	Unsecured and not guaranteed by other debtors
PPP loan	Fulcrum BioEnergy, Inc.	$169,896	Listed in funded debt summary

Filings also described separate BioFuels and Holdings bond stacks with collateral packages including deeds of trust on the Sierra plant, trust estate revenues and accounts, and membership interests.

Largest unsecured creditors. The Voluntary Petition listed the 30 largest unsecured creditors. The top 10 claims were:

Rank	Creditor	Nature	Unsecured claim (approx.)
1	Teachers Insurance and Annuity Association of America	Loan	$39,894,423.00
2	Specialty Welding & Turnarounds, LLC	Trade	$10,524,332.33
3	Rustic Canyon Ventures III LP	Loan	$5,000,000.00
4	Schmueser & Associates, LLC	Trade	$3,219,752.68
5	Aquatech International, LLC	Trade	$2,724,385.62
6	Arvos GmbH (Schmidtsche Schack)	Trade	$2,564,832.19
7	Hogan Lovells	Professional services	$2,270,235.97
8	Spartan Companies 300 LLC	Trade	$2,244,949.65
9	Linde Inc.	Trade	$2,160,214.96
10	Siemens Energy, Inc.	Trade	$1,784,448.77

The list also included Marathon Petroleum at about $858,925 and Waste Management at about $363,293.

Professionals and Fee Procedures

Debtor professionals. The debtors retained Morris, Nichols, Arsht & Tunnell LLP as bankruptcy counsel, with an advance payment retainer of $74,129.45 and hourly rates ranging from $195 for case clerks to $1,695 for partners. Development Specialists, Inc. served as financial advisor and investment banker, with an $80,000 monthly fee cap and hourly rates that included $745 per hour for named personnel; the retention order treated the success fee under section 328 and other compensation under sections 330/331. Kurtzman Carson Consultants, LLC dba Verita Global was appointed claims and noticing agent and also served as administrative advisor; claims agent compensation was allowed under the engagement agreement without fee applications, while administrative advisor fees required court approval, and the papers disclosed a $50,000 prepetition retainer and $30,000 prepayment. The court's interim compensation procedures allowed monthly payment of 80% of fees and 100% of expenses, with quarterly interim fee applications to reconcile holdbacks.

Committee professionals. The unsecured creditors' committee, appointed September 19, 2024, retained Morris James LLP and Eversheds Sutherland as counsel under sections 330/331 with restrictions on contract attorney markups and notice requirements for rate increases; Dundon Advisers as financial advisor with hourly rates up to $960 and non-working travel billed at 50%; and Layer 7 Capital as sale banker with a $50,000 fee plus 25% of the Prepetition Lender Estate Fund Carveout, subject to a successful or back-up bid, while the application described a 4% success fee above the initial stalking horse bid.

Frequently Asked Questions

What did Fulcrum BioEnergy do?

Fulcrum developed a process to convert municipal solid waste into low-carbon transportation fuels. The Nevada facility converted landfill waste into synthetic crude oil and was designed to process 219,000 metric tons of garbage per year. Bioenergy Insight called it the first commercial waste-to-sustainable fuel facility in the U.S..

When did Fulcrum file chapter 11 and where?

Fulcrum filed chapter 11 on September 9, 2024 in the U.S. Bankruptcy Court, District of Delaware (Case 24-12008, Judge Thomas M. Horan).

Why did the Sierra BioFuels Plant stop operating?

Reports said the plant shut down in mid-May 2024 after equipment problems, including clogging, nitric acid corrosion, and sludge buildup.

How much debt or obligations were reported at the filing?

Reporting put obligations to more than 200 creditors at over $456 million. Court filings reported prepetition funded debt of about $456.6 million.

What bond financing supported the Nevada project, and what happened?

The project was financed through about $290 million in environmental improvement revenue bonds with UMB Bank as trustee. The company missed a payment in August 2023, entered a forbearance agreement on October 25, 2023, and UMB later reported a default and demand for accelerated repayment.

Who invested or signed offtake agreements?

Investors included airBP, United Airlines, Japan Airlines, and SK Group. United committed a $30 million investment and a 10-year supply agreement for at least 90 million gallons of SAF per year. Cathay Pacific invested in 2014 and signed a 375 million gallon, 10-year offtake agreement.

What DIP financing did Fulcrum obtain?

Switch provided a $5 million DIP facility that carried 10% PIK interest and milestones tied to the sale process, with the DIP obligations available for credit bid in the asset sale.

Who bought the Nevada assets?

The November 2024 auction resulted in Switch acquiring the biorefinery and Refuse Inc. (a WM subsidiary) buying the feedstock facility. Court filings listed prevailing bids of $55 million for the biorefinery assets and $3 million for the feedstock assets.

What happened with the Gary, Indiana project?

Fulcrum planned a Gary facility expected to use up to $500 million in tax-exempt bonds. Local reporting said the project promised $600 million in investment and 160 jobs and faced a permit challenge from GARD.

Who is the claims agent for Fulcrum BioEnergy?

Donlin, Recano & Company, LLC serves as the claims and noticing agent. A November 2025 order terminated Kurtzman Carson Consultants, LLC dba Verita Global and appointed Donlin Recano to maintain the claims register for the cases.

For more bankruptcy case analyses and restructuring insights, visit ElevenFlo's bankruptcy blog.

Sources

1. DIP Motion /documents/408c636b-cece-4893-8022-fb7ad0fe9dfb/
2. Final DIP Order /documents/ec2462e9-4492-4553-ab05-2209b5a11246/
3. Amended Final DIP Order /documents/e051e465-259c-48e6-ad67-0c2d93801ad6/
4. Bidding Procedures Order /documents/64574e15-3f8a-455f-a0ad-65db9551bb82/
5. Sale Motion /documents/1abb6d7a-a72c-4c4c-b860-9cb58d74b4bf/
6. Biorefinery Sale Order /documents/ca377b8d-881f-42ee-a55d-c7fceb28b466/
7. Feedstock Sale Order /documents/e72235c6-183a-4332-a1fe-88a70346ff89/
8. Catalyst Sale /documents/7cda96e7-42de-40e9-88d5-3bcd5dd4bc54/
9. Agent Credit Bid Sale /documents/2f971ee7-b3ff-4dd6-b692-bb26a1ac2a99/
10. UK Share Sale /documents/c507b69f-65c3-4355-9177-40139ee46c25/
11. Disclosure Statement /documents/0623f7c5-fa73-46d7-88bb-1a9d5eb614aa/
12. Confirmation Order /documents/eac960b4-4b3a-44df-a310-42c9086045b4/
13. Plan of Liquidation /documents/a039cf38-a789-4fc6-b241-10f1c528033a/
14. Plan Supplement /documents/3d5f2b6c-ea8b-4bcc-96d0-3387d3520c4b/
15. moved to extend /documents/1a9d7adf-1066-4dc6-aca1-d800726947ae/
16. order /documents/fd84b991-a107-4dd9-9be5-b17d75ebfbd7/
17. First Day Declaration /documents/46aa25b0-3938-4997-87d4-ea7f8d38369f/
18. Voluntary Petition /documents/5ab96c45-bdb6-46af-9c78-bc92125b6021/
19. Morris, Nichols, Arsht & Tunnell LLP /documents/4bf4db7b-b387-4b8a-9898-b0c2ab4b7c75/
20. interim compensation procedures /documents/982c3770-02f5-4d5b-97ee-83d48c0b1e31/
21. Morris James LLP /documents/fe88d667-5ac8-47a6-9de4-a8439716bfae/
22. Layer 7 Capital /documents/cc370d76-426e-4a3e-9126-b2696bae84a6/
23. waste-to-fuel company https://www.businesswire.com/news/home/20240918647885/en/Solicitation-for-Bids-of-the-Assets-of-Fulcrum-Sierra-BioFuels-LLC-and-Fulcrum-BioEnergy-Inc.
24. over $456 million https://www.wastedive.com/news/fulcrum-bioenergy-chapter-11-bankruptcy-nevada/726555/
25. stopped operating in mid-May 2024 https://cen.acs.org/energy/Fulcrum-BioEnergy-abandons-trashfuel-plant/102/web/2024/06
26. nitric acid formation that corroded equipment https://www.thechemicalengineer.com/features/why-the-lessons-of-the-fulcrum-fiasco-must-not-be-wasted
27. sludge buildup https://www.safinvestor.com/news/145909/fulcrum-bioenergy/
28. Switch Ltd. provided a $5 million DIP loan https://www.law360.com/bankruptcy-authority/articles/1888562/fulcrum-gets-ok-for-5m-ch-11-loan-from-potential-buyer
29. Switch acquiring the biorefinery https://www.wastedive.com/news/fulcrum-bankruptcy-auction-assets-sold-wm-abengoa/
30. Marathon Petroleum for refining https://www.argusmedia.com/en/news-and-insights/latest-market-news/2608211-fulcrum-bioenergy-files-for-chapter-11-relief
31. first commercial waste-to-sustainable fuel facility in the U.S. https://www.bioenergy-news.com/news/fulcrum-bioenergy-files-for-bankruptcy-protection/
32. $30 million equity investment https://united.mediaroom.com/2015-06-30-United-Airlines-Purchases-Stake-in-Fulcrum-BioEnergy-with-30-Million-Investment
33. 375 million gallon, 10-year offtake agreement https://news.cathaypacific.com/cathay-pacific-invests-in-sustainable-biojet-fuel-developer-171569
34. up to $500 million in tax-exempt bonds https://www.bondbuyer.com/news/nevada-garbage-to-jet-fuel-project-defaults-indiana-follow-up-on-hold
35. $600 million in investment and 160 jobs https://www.chicagotribune.com/2024/09/17/gary-officials-environmental-group-react-to-fulcrum-bioenergy-bankruptcy-filing/
36. exclude plastics-to-fuel projects from Inflation Reduction Act credits https://insideclimatenews.org/news/20112023/fulcrum-gary-indiana-net-zero-jet-fuel/
37. missed a monthly payment in August 2023 https://www.wastedive.com/news/fulcrum-bioenergy-sierra-biofuels-forbearance-reno-nevada-gary-indiana/698991/