Iceland thinks they have sagas. Pshaw.
This one has executives fearing for their bonuses, Drax*, Germans, subsidies, Putin, paleolithic flashbacks and so much more.
From the Wall Street Journal, August 27
Creditors say Enviva’s former C-suite blew up the once-highflying green-energy company by chasing bonus targets
The fight for restitution is on at a fallen green-energy giant, following one of the most disastrous commodity trades of the decade.
The ill-fated wood-pellet trades that bankrupted Enviva during the sustainable-investing boom were made by executives hoping to trigger their own bonuses, according to creditors who are seeking more than $2 billion in damages.Instead of producing big profits that would spur payouts for Enviva’s C-suite, however, the nine-figure trades backfired and bankrupted the company, which once had a nearly $6 billion market value. Shareholders received nothing in the bankruptcy, and some bondholders recovered just pennies on the dollar.
Five of the company’s top executives concealed the inordinately large and risky trades from its board, according to a lawsuit filed last week by investors, suppliers and others with claims outstanding after Enviva’s 2024 bankruptcy.“A board of directors cannot fulfill its duties if corporate officers withhold material information and act beyond the scope of their authority,” said Eric Madden, one of the plaintiffs’ lawyers.The allegations draw on findings from a seven-month board investigation into the trades that sent the country’s largest exporter of wood pellets spiraling toward insolvency.The board enlisted law firm Baker Botts, which determined that there were solid legal claims to be made against the executives, according to bankruptcy filings.Lawyers representing the five former Enviva executives, including former Chief Executives John Keppler and Thomas Meth, either declined to comment or didn’t respond.Enviva said it wasn’t involved in the litigation, and none of the former executives named in the suit are affiliated with the reorganized company, which emerged from bankruptcy in December 2024 with new owners and leadership.Enviva’s creditors are unlikely to recoup anything close to $2 billion. Recovery cases are fairly common following corporate bankruptcies and are typically settled without trial. Once legal fees are paid, creditors usually receive whatever is left of the company’s directors-and-officers liability insurance coverage.The suit, though, sheds new light on Enviva’s collapse. The company was considered one of the winners of the green-energy boom, and demand for wood pellets was rising when it imploded.Enviva pioneered the business of pressing sawdust into cylindrical capsules and shipping boatloads of them to overseas power plants looking to burn an alternative to coal. The company built pellet plants across the southern U.S., moving into parts of the pinery where pulp and paper mills had closed and left behind surfeits of sawdust, wood chips and cheap pulpwood.The smokestack emissions are comparable with those from burning coal. Nonetheless, governments in Europe and Asia subsidized wood pellets as renewable energy. Not only would another crop of trees be planted, they reasoned, but the new trees would absorb carbon dioxide from the atmosphere as they grew.Russia’s 2022 invasion of Ukraine shocked energy markets and boosted demand for wood pellets, along with coal, natural gas and anything else that could be burned to generate electricity.At the time, Enviva was dealing with problems at some plants that made it difficult to fulfill obligations to customers. The company was at risk of missing profit targets. Executives were in danger of losing out on annual bonuses that, in some cases, would more than double their salaries, creditors claim.
Russia’s 2022 invasion of Ukraine shocked energy markets and boosted demand for wood pellets, along with coal, natural gas and anything else that could be burned to generate electricity.
At the time, Enviva was dealing with problems at some plants that made it difficult to fulfill obligations to customers. The company was at risk of missing profit targets. Executives were in danger of losing out on annual bonuses that, in some cases, would more than double their salaries, creditors claim....
Previously:
June 2022 - "Ban on Russian wood pellet exports to Europe to cause difficulties with waste disposal at Russian sawmills"
Ah ha! Maybe these sanctions will be the ones that bring the Russians to their knees.
November 2023 - Renewable Fuel: "Wood Pellet Giant Enviva Discloses a Financial Crisis"
January 2024 - Who Is Going To Supply Europe's Wood-Burning Power Plants Now, Putin? (EVA)Opportunity for Sweden and Finland.
March 2024 - "Why Britain is burning North American forests to keep the lights on" (EVA)
Additionally, having the largest American supplier of firewood to Britain going bust - a bankruptcy filing is possible at literally any minute - does not add luster to the "We burn wood" marketing tagline.
March 2024 - Update: "Enviva’s Stock Rises After Wood-Pellet Exporter Gets Another Week to Make Bond Payment" (EVA)
March 2024 - Wood Fuel Maker Enviva Has Filed For Chapter 11 Bankruptcy Protection (EVA [Q?}
More On Britain Burning Wood [including tips on how to write to King Charles III]