Fulcrum BioEnergy is proceeding with a sale of its assets following Chapter 11 bankruptcy, according to financial documents. The liquidation winds down a company that once aspired to help decarbonize the aviation sector with a waste-derived fuel.
Refuse Inc., a WM subsidiary, received approval from a federal judge on Nov. 14 to purchase Fulcrum's feedstock processing facility adjacent to WM's own Lockwood Regional Landfill in Nevada. Another entity, Switch, Ltd., acquired the facility where Fulcrum processed its feedstock into synthetic crude.
Switch, a Las Vegas-based data center operator, initially submitted a stalking horse bid of $15 million for Fulcrum’s assets. That bid set the floor for the auction process, which proceeded later in the fall. A dollar amount for WM’s bid was not disclosed.
Fulcrum once predicted that its Sierra Biofuels facility, located in Sparks, Nevada, could produce nearly 11 million gallons of sustainable aviation fuel annually. The facility would take in 175,000 tons of municipal solid waste annually from partners like WM and Waste Connections, converting it first into a synthetic crude oil product that would be converted into SAF.
Despite backing from major aviation and waste companies as well as the U.S. Department of Defense, the project failed to take off. It reportedly shipped only a small amount of synthetic crude in late 2022 before shutting down for repairs. The plant subsequently restarted operations, only to require more repairs after issues with its gasification system, Bloomberg reported.
Fulcrum shut down the Sierra Biofuels facility completely in May and laid off its workers. Its CEO, Eric Pryor, departed around that time.
Fulcrum BioEnergy filed for Chapter 11 bankruptcy in September. The company and its affiliates have subsequently disclosed financial information in U.S. Bankruptcy Court for the District of Delaware as part of the Chapter 11 process.
As of Oct. 31, Fulcrum BioEnergy recorded a net worth of -$420.3 million. Fulcrum Sierra BioFuels reported a net worth of -$346.7 million. Fulcrum Sierra Holdings reported a net worth of about -$104 million. Fulcrum Sierra BioFuels also reported continuing general and administrative expenses plus interest costs.
It’s unclear what will become of Fulcrum’s Nevada assets. The feedstock processing facility purchased by WM was upgraded by Van Dyk Recycling Solutions in late 2021. The renovation allowed the facility, which pulled out organics from MSW, to process 120 tons of waste per hour across two lines to produce a gasifier feedstock, according to a Van Dyk spokesperson.
WM did not respond to a request for comment about its plans for the site. Representatives for Fulcrum and Switch also did not respond to requests for comment.
The Fulcrum estate will continue to navigate outstanding legal processes. Court filings show the company is still in international arbitration negotiations with Abengoa.
The Spanish company secured a $200 million engineering, procurement and construction contract with Fulcrum to build the Sierra BioFuels plant, but itself faced financial challenges.
Fulcrum and Abengoa's legal troubles date back to at least 2020. Reports from the time show that the two sides pointed fingers at each other over possible cost overruns at the Sierra site, with rumors of suppliers not receiving payment.
Since last year, several companies have begun to file suit against Fulcrum and its subsidiaries over alleged missed payments. Contractors like United Rentals and Delta Tech Services are collectively seeking more than $2 million from Fulcrum across more than a dozen lawsuits. It's unclear where those stand following the bankruptcy auction.
