SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 13, 2012 (December 8, 2012)
NEDAK Ethanol, LLC
(Exact Name of registrant as specified in its charter)
Item 8.01 Other Events
As previously disclosed, NEDAK Ethanol, LLC (the “Company”) is in default under its loan agreements with both its senior lender, AgCountry Farm Credit Services, FLCA (the “Senior Lender”), and its tax increment financing lender, Arbor Bank (the “TIF Lender”) and both the Senior Lender and the TIF lender have accelerated the repayment of all amounts due under the respective loan agreements and informed the Company that they intend to exercise their remedies under the respective loan agreements and take such actions as deemed necessary or desirable to protect their interest in the collateral which includes all or substantially all of the assets of the Company. Also as previously disclosed, the Senior Lender recorded a Substitution of Trustee under the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement, as amended (the “Deed of Trust”) which secures the indebtedness under the Senior Lender loan documents and on October 8, 2012, the substitute trustee recorded a Notice of Default and Election to Sell the trust property (“Election to Sell Notice”). The trust property includes the plant site, the transload site, the Company’s leased property and easements as described in more detail in the Deed of Trust.
The Company had two months following the recording of the Election to Sell Notice to cure the defaults under the Senior Lender loan agreements and pay the entire unpaid principal sum secured by the Deed of Trust in the amount of $25,497,877, accrued late charges in the amount of $163,672 and accrued interest which was $828,345 as of October 9, 2012. The two-month cure period lapsed on December 8, 2012 and the Company has not cured the defaults under the Senior Lender loan documents. Because the Company did not cure the defaults, the substitute trustee has the right to initiate foreclosure proceedings to sell the trust property at a sheriff’s sale in accordance with applicable law in order to satisfy the unpaid obligations of the Company under the Senior Lender loan agreements.
The Company continues to explore all of its options including, without limitation (i) continued discussions with the Senior Lender and the TIF Lender, (ii) seeking new sources of financing and (iii) searching for potential purchasers of the Company or its assets. However, the Company can give no assurance that it will obtain sufficient funds from any source(s) to enable the Company to cure the defaults under its loan agreements with its lenders or that if it can obtain any additional financing, that such financing would be sufficient to restart production at the plant and commence operations. The Company also can give no assurance that it will be able to find a potential purchaser of the Company and/or its assets, reach any agreement with its lenders that will enable the Company to restructure its current indebtedness or otherwise avoid the initiation and completion of the foreclosure proceedings.
The Company expects that if a foreclosure sale is completed, upon the conclusion of the foreclosure proceedings, there will not be any monies or assets available to distribute to its members or creditors other than the Senior Lender.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.