Aurora Cooperative Elevator Company v. Aventine Renewable Energy - Aurora West, LLC

Filing 93

MEMORANDUM AND ORDER: 1)Plaintiff's motion for leave to issue a subpoena to non-party Houlihan Lokey, Inc., (Filing No. 56 ), and motion to compel, (Filing No. 61 ), are granted in part, and denied in part as set forth in the court' s memorandum and order. 2) The parties are advised that the court has diligently attempted to memorialize the parties agreements and the courts orders as discussed during the hearing. If this order appears to deviate from those discussions and rulings, the parties shall review the recording, (Filing No. 90 ), for further clarification. Ordered by Magistrate Judge Cheryl R. Zwart. (Zwart, Cheryl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

AURORA COOPERATIVE ELEVATOR
COMPANY,
4:12CV0230
Plaintiff,
vs.

MEMORANDUM AND ORDER

AVENTINE RENEWABLE ENERGY AURORA WEST, LLC, AVENTINE
RENEWABLE ENERGY HOLDINGS,
INC.,
Defendants.
The following motions are pending before me:
 Plaintiff’s motion for leave to issue a subpoena to non-party Houlihan Lokey,
Inc., (Filing No. 56), and
 Plaintiff’s motion to compel, (Filing No. 61).
After conducting an extensive hearing on the record, the plaintiff’s motions are
granted in part, and denied in part as set forth below.
FACTUAL BACKGROUND
The plaintiff, Aurora Cooperative Elevator Company, entered in to a contract with the
defendants (hereinafter “Aventine”) for construction of an ethanol production plant west of
Aurora, Nebraska—the “Aurora West” facility. Aventine produces and markets ethanol, an
alcohol principally derived from corn. (Filing No. 58-4, at CM/ECF p. 3; Filing No. 58-15, ¶
3). As part of the contract, Aventine granted Aurora Coop an option to repurchase the
Aurora West site if Aventine abandoned development of the plant or failed to pay
performance penalties for not meeting development deadlines.
Aventine contracted with Kiewit Energy Company in May of 2007 to begin building
the Aurora West facility. But construction was later suspended due to a downturn in the
ethanol market. In February 2009, Kiewit filed mechanics liens against the Aurora West

property totaling $16,125,620. On April 7, 2009, Aventine initiated Chapter 11 bankruptcy
proceedings. (Filing No. 58-15, at CM/ECF p. 5). Kiewit terminated its contract with
Aventine. (Filing No. 58-4, at CM/ECF p. 5).
During the bankruptcy proceedings, Aventine engaged in negotiations to complete the
Aurora West facility, and intended to recommence construction in April of 2011.

(Filing

No. 58-4, at CM/ECF p. 7-8). Houlihan Lokey, Inc. served as Aventine’s financial advisor
and investment banker to facilitate the sale of Aventine’s assets and to locate investors.
(Filing No. 58-4, at CM/ECF p. 6). Houlihan Lokey assessed the degree of uncompleted
construction and concluded that as of January 13, 2010, significant additional construction
and development was needed to complete the 110 million gallon capacity plant at the Aurora
West facility. (Filing No. 58-4, at CM/ECF p. 18). William Hardie of Houlihan Lokey
testified before the bankruptcy court on these issues. (Filing No. 58-6, at CM/ECF p. 9).
The bankruptcy court later determined that Houlihan Lokey failed to disclose its
relationships with investors such as Whitebox and Brigade, both of whom were approved as
investors in Aventine’s assets during the course of the bankruptcy proceeding. (Filing No.
58-10).
Aventine emerged from bankruptcy on March 15, 2010.

(Filing No. 58-7, at

CM/ECF p. 4). By then, Aventine owed Aurora Cooperative more than $2 million in
performance penalties under the parties’ Master Development Agreement. (Filing No. 5815, at CM/ECF p. 8). On March 23, 2010, the parties modified the MDA to include an
Amended Option to repurchase. (Filing No. 58-15, ¶ 9). Under the terms of that Amended
Option, Aurora Coop was granted the right to repurchase the Aurora West site for $16,500
per acre (the purchase price), subject to certain offsets, if Aventine breached the construction
contract. The deadline for completing the contract was July 1, 2012.
During the first nine months of 2010, Aventine spent approximately $71.2 million on
capital projects, including $50.6 million on the Mount Vernon, Indiana and Aurora, Nebraska
ethanol plants, and $18.6 million to acquire a facility near Canton, Illinois.

Aventine

anticipated spending approximately $11 million more to complete the Mount Vernon,

Indiana and Aurora, Nebraska facilities. (Filing No. 58-7, at CM/ECF p. 6; Filing No. 58-12,
at CM/ECF p. 4). By November 2010, the Mount Vernon plant was producing ethanol, and
as of December 2010, it was functioning at 55% capacity. (Filing No. 58-17, at CM/ECF p.
3).
During the first half of 2011, Aventine continued to focus its efforts on the plant in
Mount Vernon and allegedly removed equipment from the Aurora West location for use at
the Mount Vernon plant.

(Filing No. 58-15, ¶¶ 12-15).

production continued to increase during 2011.

The Mount Vernon plant’s

(Filing No. 58-18).

As of July 2011,

Aventine’s “operational focus [was] to implement identified changes to bring the Mount
Vernon plant closer to full capacity.” Aventine reasoned that resolving new plant production
issues at Mount Vernon would help Aventine move forward with the start-up of the Aurora
West facility, “an identical twin of the Mount Vernon” plant. (Filing No. 58-21). See also,
Filing No. 58-16, at CM/ECF p. 2.
Aurora Coop’s complaint alleges Aventine breached the MDA. Aurora Coop seeks a
judgment “requiring the defendants to convey the Aurora West Facility and the Plant to
Aurora Co-op in accordance with the terms of the Amended Option.” (Filing No. 13, at
CM/ECF p. 8).

As determined by Judge Gerrard, the issue to be litigated is whether

Aventine failed to diligently pursue construction of the Aurora West Facility and complete
construction of a facility capable of producing a minimum of 110 million gallons of ethanol
per year by July 1, 2012. (Filing No. 44, at CM/ECF p. 13-17).
Either the plant was complete by July 1, 2012—that is, capable of producing
110 million gallons of ethanol per year—or it was not. Aventine can assert
whatever it wants, but if that assertion does not match the evidence, Aventine
will have breached the parties’ agreement.
(Id. at 14.)
There is no direct evidence of the facility’s production capability as of July 1, 2012.
Based on the filings of record, neither party operated the facility at maximum capacity on or
before July 1, 2012 to test its production capacity and its ability to sustain that level over a
period of time. Absent reliable direct evidence, the parties must rely on circumstantial

evidence as interpreted by lay and expert testimony to prove the facility’s production
capacity as of July 1, 2012. Both parties are entitled to discover facts which are relevant, or
could lead to the discovery of relevant information, on that issue.
Motion to Compel
(Filing No. 61)
With few exceptions, the parties were unable to resolve their discovery dispute as to
every interrogatory and request for production served by the plaintiff. After conducting a
hearing and discussing the issues before the court, the parties agreed and/or the court ruled
on the discovery as follows:
INTERROGATORY NO. 1: Identify every individual, entity or group that is likely to
possess documents related to your development of the real property located in Hamilton
County, Nebraska, legally described as follows: Lots Five (5) and Six (6), Aurora West
Subdivision Replat, an addition to the City of Aurora, Hamilton County, Nebraska
(hereinafter, the "Aurora West Site") or the construction, operation, or valuation of the
ethanol plant Aventine was required to site, design, construct, and equip pursuant to
Article II of the Master Development Agreement dated August 1, 2006 (the "Aurora
West Ethanol Plant").
Ruling: The defendants’ objections are sustained, in part. To the extent this
interrogatory addresses construction, the defendants will produce responsive
documents for the time period beginning on March 15, 2010, and the plaintiff will
rely of the information within those documents, and the information provided in
response to interrogatories 3 and 4 as responsive to interrogatory 1. As to the issue of
construction, the March 15, 2010 date limitation does not foreclose the plaintiff from
later obtaining responsive information regarding any issue with the Aurora West Plant
that pre-existed but remained unresolved when Aventine emerged from bankruptcy
and which may have impacted the plant’s production capability as of July 1, 2012, or
may have any bearing on defendants’ alleged failure to diligently pursue construction
after emerging from bankruptcy.
INTERROGATORY NO. 2: Identify every individual, entity, or group whose files were
searched in response to Aurora Cooperative's requests for production in this case,
identifying by Bates number all documents that were actually produced from the files of
each such individual, entity, or group.

Ruling: Defendants’ objections are overruled. The defendants shall answer this
interrogatory. The court specifically finds that identifying the source of the
documents produced is relevant and important in moving this case forward and
engaging in orderly discovery, including deposition discovery.
INTERROGATORY NO. 3: Identify every one of your employees or former employees
who was responsible for, supervised, or otherwise participated in the construction,
permitting, operation, valuation, or attempted sale of the Aurora West Site or the Aurora
West Ethanol Plant, together with the subjects of all information each such employee or
former employee has concerning the Aurora West Ethanol Plant.
Ruling: The defendants’ objections are sustained, in part. The defendants shall
identify the supervisors or persons responsible for overseeing the construction,
permitting, operation, valuation, and attempted sale of the Aurora West Plant. To the
extent this interrogatory addresses construction, the defendants will respond for the
time period beginning on March 15, 2010. This date limitation does not foreclose the
plaintiff from later obtaining responsive information regarding any issue with the
Aurora West Plant that pre-existed but remained unresolved when Aventine emerged
from bankruptcy and which may have impacted the plant’s production capability as of
July 1, 2012, or may have any bearing on defendants’ alleged failure to diligently
pursue construction after emerging from bankruptcy.
INTERROGATORY NO. 4: Identify every third party (including but not limited to
contractors, consultants, accountants, auditors, attorneys, or business brokers) that has
performed any type of work or provided any service for the benefit of you related in any
way to the construction, permitting, operation, valuation, or attempted sale of the Aurora
West Site or the Aurora West Ethanol Plant.
Ruling: The defendants’ objections are sustained, in part as follows:
1)

The defendants shall identify any third parties who provided assistance or
expertise to the supervisors or persons responsible for overseeing permitting
and the operation of the plant in 2012.

2)

The defendants shall identify any third parties who provided assistance or
expertise to the supervisors or persons responsible for overseeing any
valuation and attempted sale of the plant from and after April 7, 2009, the date
Aventine filed bankruptcy proceedings.

3)

To the extent this interrogatory addresses construction, the defendants will
provide responsive documents for the time period beginning on March 15,
2010, and the plaintiff will rely of the names disclosed in those documents.

This date limitation does not foreclose the plaintiff from later obtaining
responsive information regarding any issue with the Aurora West Plant that
pre-existed but remained unresolved when Aventine emerged from bankruptcy
and which may have impacted the plant’s production capability as of July
2012, or may have any bearing on defendants’ alleged failure to diligently
pursue construction after emerging from bankruptcy.
INTERROGATORY NO. 5: Identify every actual or potential source of funding
(including but not limited to lenders, investors, investment banks, and private equity
funds) that you have approached regarding funding for the construction, permitting,
operation, or attempted sale of the Aurora West Site or the Aurora West Ethanol Plant.
Ruling: The defendant’s objections are sustained, in part. For the time frame
beginning with the defendants’ bankruptcy filing until July 1, 2012, as to both actual
and prospective funding sources Aventine approached regarding funding for the
construction, permitting, operation, or attempted sale, the defendants shall respond to
this interrogatory.
INTERROGATORY NO. 6: Describe in detail all issues, problems, considerations,
defects and other occurrences which delayed the construction, permitting, or operation of
the Aurora West Ethanol Plant and all efforts you contend you undertook to overcome
them.
Ruling: The defendants’ objections are sustained, in part. The defendants’ response
will be limited to the described information dated after Aventine emerged from
bankruptcy on March 15, 2010, subject to further discovery regarding any problems
with construction that were identified prior to Aventine’s bankruptcy, which were
never resolved or were not resolved until after the bankruptcy proceedings. A “delay”
shall be interpreted to mean that a project or task was not or could not be completed
in the time anticipated at the outset of starting that project or task.
INTERROGATORY NO. 7: Identify every person who participated in the preparation of
your responses to Aurora Cooperative's Interrogatories in this case.
Ruling: Defendants’ objections are overruled. The defendants shall answer this
interrogatory by identifying not only who collected information to answer the
interrogatories, but also the people who were sources of that information and the topic
or topics each such source addressed.
REQUEST NO. 1: All documents and tangible things that you may use to support your
claims or defenses in this case.

Ruling: With the exception of emails, the defendants have produced these documents
and acknowledges its ongoing responsibility to supplement its responses. Email
discovery will be produced on or before December 31, 2013.
REQUEST NO. 2: All agreements between you and Kiewit relating to the Aurora West
Ethanol Plant.
REQUEST NO. 3: All agreements between Kiewit and any of its subcontractors,
including but not limited to Delta-T Corporation, relating to the Aurora West Ethanol
Plant.
REQUEST NO. 4: All letters, emails, reports, drawings, diagrams, plans, computer
models, notes, journals, meeting minutes, and schedules (including but not limited to
drafts or preliminary versions thereof) that you provided to, received from, or reviewed
with Kiewit or any of its subcontractors, including but not limited to Delta-T, relating to
the Aurora West Ethanol Plant.
REQUEST NO. 5: All agreements between you and Fagen relating to the Aurora West
Ethanol Plant.
REQUEST NO. 6: All agreements between Fagen and any of its subcontractors,
including but not limited to ICM, Inc., relating to the Aurora West Ethanol Plant.
REQUEST NO. 7: All letters, emails, reports, drawings, diagrams, plans, computer
models, notes, journals, meeting minutes, and schedules (including but not limited to
drafts or preliminary versions thereof) that you provided to, received from, or reviewed
with Fagen or any of its subcontractors, including but not limited to ICM, Inc., relating to
the Aurora West Ethanol Plant.
Ruling: As to Requests 2 through 7, the defendants have produced a portion of these
documents. After discussing the merits of the requests and the defendants’
objections, the parties represent and believe that after further good faith discussions,
they will be able to agree on the scope of production for responding to these requests.
The court expects the parties to do so, and to the extent they can, to more specifically
identify any construction issues that may have impacted the Aurora West Plant’s
production capacity and any issue of whether the defendants did, or did not, diligently
pursue construction, with further in-depth document production targeted on those
identified issues or potential issues.
REQUEST NO. 8: All documents you provided to, received from, or reviewed with the
Nebraska Department of Environmental Quality relating to the Aurora West Ethanol
Plant.

Ruling: The defendants have produced the permits. The request was has been
resolved by the parties.
REQUEST NO. 9: All invoices, work orders, shipping orders, bills of lading, notes,
memoranda, and other documents reflecting the removal of equipment from the Aurora
West Ethanol Plant prior to July 1, 2012.
Ruling: The defendants have produced a document explaining the items that were
removed from the Aurora West Ethanol Plant prior to July 1, 2012, and the removal
dates. The defendants will identify this document by Bates number. With that
explanation and the plaintiff’s agreement, this request was has been resolved by the
parties.
REQUEST NO. 10: All reports, memorandums, plans, designs, diagrams, drawings,
presentations, and computer models you prepared, reviewed, or otherwise relied upon in
anticipation of operating the Aurora West Ethanol Plant.
Ruling: The defendants’ objections are granted, in part. The plaintiff is requesting
operational documents indicating whether and what Aventine considered, or any
concerns it had, about starting up the plant, maintaining its operation, and complying
with the terms of the parties’ post-bankruptcy contract, and any measures or plans
contemplated, completed, or rejected by the defendants to meet the timeline and terms
of that contract. The defendants shall produce all such documents, and to the extent
those documents may currently be in an electronic format, the parties shall work
together to generate search terms for identifying and producing responsive
documents.
REQUEST NO. 11: All documents reflecting predictions or doubts about the rate at
which the Aurora West Ethanol Plant is (or was) actually capable of producing ethanol,
either before or after you operated the Aurora West Ethanol Plant in June, 2012.
Ruling: To date, defense counsel’s document review has not uncovered any
responsive documents. The defendants shall produce all such documents, and to the
extent those documents may currently be in an electronic format, the parties shall
work together to generate search terms for identifying and producing responsive
documents for the time period from March 15, 2010 until July 1, 2012.
REQUEST NO. 12: All records you generated in the course of operating the Aurora
West Ethanol Plant, including but not limited to such records generated or maintained by
the plant's distributed control system, or any similar system.
Ruling: The parties resolved their dispute regarding this request.

REQUEST NO. 13: Records sufficient to show the amount of corn ground during your
operation of the Aurora West Ethanol Plant.
Ruling: The parties resolved their dispute regarding this request.
REQUEST NO. 14: Records sufficient to show the quantity of the alcohol produced
during your operation of the Aurora West Ethanol Plant, as well as all results of tests
performed on that alcohol.
Ruling: The parties resolved their dispute regarding this request.
REQUEST NO. 15: Records sufficient to show the disposition of all alcohol generated
by the Aurora West Ethanol Plant and the disposition of all byproducts of the process of
producing alcohol at the Aurora West Ethanol Plant.
Ruling: The defendants’ objections are sustained, in part. Defendants shall respond
by producing any documents relating to the disposition of alcohol generated by the
plant and either transferred to a third-party for immediate use but rejected by the
buyer as needing further refining, or transferred to a third party needing, or for the
purpose of obtaining, further refining.
REQUEST NO. 16: All records reflecting materials that were emitted into the air or
discharged into water treatment facilities or water tributaries as a result of your operation
of the Aurora West Ethanol Plant.
Ruling: To the extent not already produced, the defendants shall produce any
emission records for the time frame during which the Aurora West Ethanol Plant was
operated.
REQUEST NO. 17: All agreements between you and any third party pursuant to which
you undertook responsibility to site, design, construct, or equip the Mount Vernon
Ethanol Plant.
Ruling: Defendants have stated the Mount Vernon Plant is an identical twin of the
Aurora West Plant. The Mount Vernon and Aurora West Plant construction was
underway during the same time frame. The plaintiff claims the defendants prioritized
and actively pursued the Mount Vernon Plant construction to the detriment of timely
completing the Aurora West Plant, and the defendants have asserted it was not
economically feasible to complete and operate the Aurora West Plant. For those
reasons, the primary contract with the third party cooperative or entity in Indiana for
construction of the Mount Vernon Ethanol Plant may contain relevant information.
Defendants shall produce the contract as an “Attorneys’ Eyes Only” document, with

its dissemination prohibited in accordance with the Protective Order entered in this
case. Any future disputes regarding any further dissemination or redaction of that
documents(s) shall be promptly addressed to the court.
REQUEST NO. 18: All agreements between you and Kiewit, or between Kiewit and its
subcontractors, relating to the Mount Vernon Ethanol Plant.
Ruling: Defendants shall produce the contracts between Aventine and Kiewit for
construction of the Mount Vernon plant. If the defendants have ready access to the
Kiewit subcontracts for that plant, those subcontracts shall be produced as well. If
not, the plaintiff may pursue obtaining the subcontracts by third party subpoena.
REQUEST NO. 19: All agreements between you and Fagen, or between Fagen and its
subcontractors, relating to the Mount Vernon Ethanol Plant.
Ruling: Defendants shall produce the contracts between Aventine and Fagan for
construction of the Mount Vernon plant. If the defendants have ready access to the
Fagan subcontracts for that plant, those subcontracts shall be produced as well. If not,
the plaintiff may pursue obtaining the subcontracts by third party subpoena
REQUEST NO. 20: Documents sufficient to show all equipment removed from the
Aurora West Ethanol Plant that was installed at the Mount Vernon Ethanol Plant.
Ruling: The defendants have produced a document explaining the items that were
removed from the Aurora West Ethanol Plant and the dates of removal. The
defendants will identify that document by Bates number. With that explanation and
the plaintiff’s agreement, this request was has been resolved by the parties.
REQUEST NO. 21: Documents sufficient to show the rate at which ethanol has been
produced at the Mount Vernon Ethanol Plant from December 1, 2010 to the present.
Ruling: Defendants will investigate whether responsive information exists in a
feasible format for production. The parties will thereafter discuss in good faith the
best way to approach disclosure of the information. Unless otherwise agreed to by
the defendants, the responsive documents will be designated for “Attorneys’ Eyes
Only” and shall be guarded from dissemination in accordance with the Protective
Order entered in this case.
REQUEST NO. 22: All agendas, resolutions, and minutes of your corporate meetings
(whether of your board of directors, a committee or sub-committee of your board of
directors, or a committee or sub-committee of your management) that refer or relate to
Aurora Cooperative, the Aurora West Site, or the Aurora West Ethanol Plant.

Ruling: For the time period beginning after July of 2009, Defendants shall produce
documents in this category which reference the construction, permitting, operation
(including available grain supply), valuation, and Aventine’s contractual obligation to
Aurora Coop to the extent the contracts were discussed in the context of whether
operating the Aurora West Ethanol Plant can or would be profitable. Defendants shall
also search for any agendas, resolutions, and minutes of corporate meetings which
discuss the potential sale of the Aurora West Plant and, if responsive documents are
found, Defendants’ counsel shall contact Plaintiff’s counsel to discuss the production
of those documents. If such documents exist, and the parties’ cannot resolve their
dispute over production (whether pursuant to the protective order, as redacted
documents, or both), the parties shall promptly bring the matter to the court’s
attention.
REQUEST NO. 23: All reports you made to the federal or state regulatory agencies
(including but not limited to reports filed with the Securities Exchange Commission) that
refer or relate to Aurora Cooperative, the Aurora West Site, or the Aurora West Ethanol
Plant.
Ruling: The defendant’s objections are sustained, in part. The defendants shall
produce responsive documents for the time period beginning on April 7, 2009, when
Aventine filed bankruptcy proceedings.
REQUEST NO. 24: All pro forma financial statements, business plans, budgets,
estimates of production, estimates of capacity, and estimates of revenue for the Aurora
West Ethanol Plant.
Ruling: The defendants shall produce responsive documents to the extent those
documents address or refer to the actual, estimated, or projected ethanol capacity and
production of the Aurora West Plant, and the actual, estimated, or projected revenue
and profit from operating the Aurora West Plant.
REQUEST NO. 25: Documents sufficient to show the identity of every one of your
employees or contractors who worked at the Aurora West Ethanol Plant in June, 2012,
together with the dates and times they worked there.
Ruling: The defendants’ objections are sustained, in part. Defendants shall produce
documents in its possession or control sufficient to identify the individuals
responsible for the operation of the plant in June of 2012, whether employed by
Aventine or by a third-party contractor.
REQUEST NO. 26: All documents you have sent to or received from any prospective
buyer of the Aurora West Site or the Aurora West Ethanol Plant or any business broker

with whom you have been in contact with regard to the marketing or sale of the Aurora
West Site or the Aurora West Ethanol Plant.
Ruling: Defendants shall respond to this request to the extent the documents
requested address the defendants’ valuation of the Aurora West Plant and its actual,
estimated, or projected operational capacity, profitability, and revenue. If upon
review of those documents, the defendants discover disclosure may violate the
confidentiality of potentially interested third party buyers, the documents shall be
designated “Attorney Eyes Only;” the parties shall discuss whether further discovery
from the confidential third parties is necessary and, if so, the manner of conducting
that discovery; and any remaining dispute after those discussions shall be presented to
the court before the plaintiff contacts any confidential third party.
REQUEST NO. 27: All documents referring to the Aurora West Ethanol Plant that you
provided to or received from your lenders or prospective lenders.
Ruling: For the time frame beginning on April 7, 2009, when the defendants filed for
bankruptcy, until July 1, 2012, as to both lenders and prospective lenders, the
defendants shall respond to this request to the extent the documents requested address
the defendants’ valuation of the Aurora West Plant, its actual, estimated, or projected
operational capacity, profitability, and revenue, and Aventine’s contractual obligation
to the plaintiff regarding the Aurora West Plant. The documents shall be designated
“Attorney Eyes Only.”
REQUEST NO. 28: All documents referring to the Aurora West Ethanol Plant that you
provided to your shareholders or prospective shareholders.
Ruling: For the time frame beginning with the defendants’ bankruptcy filing on April
7, 2009, until July 1, 2012, the defendants shall respond to this request to the extent
the documents address the defendants’ valuation of the Aurora West Plant, its actual,
estimated, or projected operational capacity, profitability, and revenue, and
Aventine’s contractual obligation to the plaintiff regarding the Aurora West Plant.
The documents shall be designated “Attorney Eyes Only.”
REQUEST NO. 29: All press releases you have issued and all news articles or other
media coverage you have collected relating to the Aurora West Ethanol Plant or the
Mount Vernon Ethanol Plant, together with all records of interviews or statements
relating to the Aurora West Ethanol Plant or the Mount Vernon Ethanol Plant that were
given to the press by any of your employees or contractors.
Ruling: The defendants’ objections are denied. The defendants shall produce the
requested documents to the extent they can locate them.

Plaintiff’s Motion For Leave to Issue a Subpoena
to Non-Party Houlihan Lokey, Inc.
(Filing No. 56)
The parties have agreed that as to all topics listed in the Houlihan Lokey proposed
deposition notice, the requests are limited to documents generated after the date when
Aventine’s bankruptcy was initiated, April 7, 2009, until July 1, 2012. The parties agree that
if the documents Houlihan Lokey possesses have already been produced by the defendants,
the defendants need not produce them again. And as to all document categories other than
subsections (a), (b), (c), (n), and (o), the parties have resolved their disputes without court
intervention.
As to subsections (a), (b), and (c), wherein the plaintiff requests Aventine’s five-year
business plan (or any other business plan); projections of future financial performance of
Aventine, including potential sources and uses of cash; and Aventine’s plans for operating its
business after emerging from bankruptcy, the requests shall be limited to documents
referring or relating to:
1)

The construction, permitting, operation, valuation, or attempted sale of the
Aurora West Ethanol Plant;

2)

Any amount reserved, allocated, or set aside for the construction, permitting,
and operation of the Aurora West Ethanol Plant; and

3)

Any diversion of funds from those budgeted or allocated reserve or set aside
monies for uses or expenditures other than constructing, permitting, and
operating the Aurora West Ethanol Plant.

All documents produced as responsive to subsections (a), (b), and (c) shall be designated
“Attorneys’ Eyes Only.”
Subsection (n) relating to Aventine’s losses during commodities or securities trading
shall be limited to any speculative commodities trading or speculative securities trading
using money originally budgeted or allocated (reserved or “set aside”) for the construction,
permitting, and operation of the Aurora West Plant.
As to subsection (o), relating to the resignation of Tom Manuel, this request is limited
to documents which relate or refer to the potential loss of funds budgeted or allocated
(reserved or “set aside”) for the construction, permitting, and operation of the Aurora West
Plant, or Mr. Manuel’s failure to adequately supervise the project to ensure the construction
of the Aurora West Plant was diligently pursued.

Accordingly,
IT IS ORDERED:
1)
Plaintiff’s motion for leave to issue a subpoena to non-party Houlihan Lokey,
Inc., (Filing No. 56), and motion to compel, (Filing No. 61), are granted in part, and denied
in part as set forth above.
2)
The parties are advised that the court has diligently attempted to memorialize
the parties’ agreements and the court’s orders as discussed during the hearing. If this order
appears to deviate from those discussions and rulings, the parties shall review the recording,
(Filing No.90), for further clarification.

December 15, 2013.

BY THE COURT:
s/ Cheryl R. Zwart
United States Magistrate Judge

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