The equipment, land and other assets of the groundbreaking CalPlant factory in Willows, which saw investment of more than $500 million, are to be liquidated.
CalPlant was in development for nearly three decades to create sustainable construction products using waste rice straw.
The 276-acre grounds and factory were only in production for about six months before CalPlant filed for Chapter 11 bankruptcy reorganization in October two years ago.
Earlier this year, CalPlant abandoned the notion of plant operations at the site after the factory proved incapable of operating as a going concern, restructuring counsel Morrison & Foerster LLP said in a news release.
The CalPlant operation announced in May that it would shut down and sell off the assets of the company in an orderly liquidation.
A final decree closing the CalPlant Chapter 11 case was issued on Tuesday in U.S. Bankruptcy Court in Delaware.
The assets have now been placed in a liquidation trust and they are being offered for sale, said Lance Miller, partner in the Los Angeles consulting firm Paladin Management Group, which is handling the liquidation.
The assets included the heavy equipment and machinery at the plant, some buildings and about 276 acres of land, litigation claims and about 170,000 tons of rice straw, he said.
The CalPlant operation was the world’s first to convert rice straw — a waste product of rice farming — into environmentally friendly medium-density fiberboard. The plant represented an investment of more than $500 million over decades. The company has patents on the process.
The debtor in this case, CalPlant I LLC, was majority owned by pooled investment funds.
The plant was meant to create a sustainable and useful product that would sell at a premium. In addition to making a needed construction product, the plant aimed to solve a major problem for rice farmers in the Sacramento Valley by getting rid of rice straw.
The plant used rice straw rather than burning it, which is now largely banned in California, and without putting it into the soil, where it releases methane and requires chemical treatments to cut down on pathogens, mold and mildew.
California produces 20% of the U.S.'s rice crop, and the Sacramento Valley produces 95% of the rice in the state, according to the University of California Agronomy Research and Information Center.
CalPlant’s location is in the center of the Sacramento Valley, which usually produces more than 1.5 million tons of rice straw waste annually.
The factory was expected to process around 280,000 tons of otherwise nonrecyclable rice straw annually. CalPlant was expected to open more plants if its Willows factory was successful.
