“The debtor intends to reorganize its business or sell all of its assets so that it can continue its core research and development activities,” Christopher Artzer, Pasadena, Texas- based Kior’s interim chief financial officer, said in court papers.

Production at Kior’s commercial-scale cellulosic biofuel plant in Columbus, Mississippi, was halted in January and has since been idled and decommissioned to minimize costs. The factory opened in 2012 as the first in the U.S. to convert wood waste and non-food crops into gasoline and fuel on a commercial scale. It never reached full capacity.

Khosla Debt

The company listed consolidated assets of $58.3 million and debt of $261.3 million as of June 30 in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware. It owes about $77 million to Alberta Investment Management Corp. and about $159 million to senior lenders owned and controlled by Khosla.

Kior had said in an August regulatory filing that it wouldn’t be able to fund operations or meet obligations past the end of September without additional funding.

The company said in July it may sell itself after missing a debt payment of $1.88 million to Mississippi, which in 2010 lent the company $75 million for the plant in Columbus. The state, which still was owed $69.4 million, agreed to a forbearance period as Kior hired Guggenheim to explore its options.

Jeff Rent and Marlo Dorsey of the Mississippi Development Authority didn’t immediately respond to phone and e-mail messages seeking comment on the filing. Knox Graham, a spokesman for Mississippi Governor Phil Bryant, didn’t immediately return a phone message.

Kior reported a second-quarter net loss of $24.4 million, or 22 cents a share, and has had losses of $629.3 million since it was formed in 2007, according to the filing. Kior’s total revenue over those seven years is about $2.25 million.

Copyright 2014 Bloomberg

Lead image: For sale sign via Shutterstock