Heron Lake [* * *] COES?

First a Letter to Heron Lake BioEnergy (HLBE) members

"Our restructure also has brought the opportunity to be able to install corn oil extraction in the plant in the near future. Corn oil extraction provides another revenue stream to the company, and will provide the plant with additional options to potentially increase our production by reduction of drying the removed oil thru our steam tube dryers which today are running at capacity.


We hope to have the corn oil system installed and operational by February 1st. The outside concrete infrastructure and containment has been installed prior to the onset of frost and the corn oil tank has been delivered and installed in the containment. At the present time, HLBE is researching corn oil contracts with various end users." P. 1 Here Heron Lake BioFuel Energy (HLBE)
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Then we go to their restructure HERE - the first thing you notice is this:

"CERTAIN INFORMATION INDICATED BY [ * * * ] HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2."

Then in the same document in the section on Intellectual Property we find this:
"Borrower has entered into a [ * * * ] with [ * * * ] dated August 19, 2011, under which [ * * * ] will deliver [ * * * ] equipment to the Project and provide a Technology Service Program over a 3-year term, during which term Borrower will use the [ * * * ] equipment [ * * * ], and at the end of which term Borrower will have the right to buy the equipment. [ * * * ] is the owner or authorized user of any intellectual property rights embodied or represented in the [ * * * ] equipment, provided Borrower shall not acquire any right whatsoever to any such intellectual property rights, and provided further that [ * * * ] have asserted certain patent rights as to claimed [ * * * ] technology against various manufacturers and users of [ * * * ] technology including [ * * * ]. There may be one or more patents issued to or licensed by [ * * * ] in conjunction with the [ * * * ] equipment to be used at the Project."

Borrower makes no representation or warranty to Lender and gives no opinion to Lender on whether use of the [ * * * ] equipment infringes upon any rights of [ * * * ] or as to the outcome of the [ * * * ] or as to any rights or remedies [ * * * ] may assert against Borrower.  P. 58

And the price for the project? 

10. Borrower has entered into a [ * * * ] Agreement with [ * * * ] dated August 19, 2011, under which [ * * * ] will deliver [ * * * ] equipment and provide a Technology Service Program over a 3-year term, Borrower will pay a monthly fee of $52,000 per month over the 3-year term, and at the end of which term Borrower will have the right to buy the equipment for $1.00. p. 61

Note: If we do the math the total price is 1,872,001.  HERE shows a price of a non-GERS COES - 3 years ago at $2M.

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SkunK's Conclusion - [I want to hear your ideas in the comments!]
Heron Lake is going Corn Oil Extraction quickly and they are going to great length to hide the technology provider.  I really do not know if it is GreenShift or someone else - but I think it is someone else.  I thought it could be GreenShift, yet the price seems a bit low for a quality setup -  and this wording below kind of speaks against it - suggesting this setup might infringe GreenShift??: 
"Borrower makes no representation or warranty to Lender and gives no opinion to Lender on whether use of the [ * * * ] equipment infringes upon any rights of [ * * * ] or as to the outcome of the [ * * * ] or as to any rights or remedies [ * * * ] may assert against Borrower."

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Want more complexity? Mr. and Mrs. Fagen of Fagan construction seem to own about 43% of HERON LAKE BIOENERGY, LLC through Project Viking LLC.  Mr. Fagan is the President and CEO of Fagen, Inc.  GreenShift and Fagen appear to have a complicated business relationship where they work together on building COES and where they face each other in court over the Platinum Ethanol contract.  

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One more Layer??  ICM built the Heron Lake plant.
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Even Another Layer??  Heron Lake BioEnergy, LLC, Fagen, Inc and ICM, Inc. Enters Mutual Release and Settlement Agreement  HERE


SkunK