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Item 2. Properties.
Our loan agreements grant a security interest in substantially all of our owned real property. See
Note 10 – Debt
herein as part of the Notes to Consolidated Financial Statements for a discussion of our loan agreements.
We currently lease approximately 29,857 square feet of office space at 450 Regency Parkway in Omaha, Nebraska for
our corporate headquarters, which houses our corporate administrative functions and commodity trading operations.
Ethanol Production Segment
As disclosed and detailed in our discussion of the ethanol production segment, we own a total of approximately 1,530
acres of land in nine locations with a combined plant production capacity of 740 mmgy. We also lease approximately 129
acres of land near our Obion plant. We believe that the property owned and leased at the sites of our nine ethanol plants will
be adequate to accommodate our current needs, as well as potential expansion, at those sites.
Agribusiness Segment
We own approximately 134 acres of land at seven locations in northwest Iowa for our agribusiness operations with grain
storage capacity of approximately 19.6 million bushels, 3.6 million gallons of liquid fertilizer storage and 12,000 tons of dry
fertilizer storage. We also own approximately 11 acres of land at our grain elevator in Essex, Iowa, with grain storage
capacity of approximately 1.9 million bushels at this site. In west Tennessee, we own 38 acres of land with grain storage
capacity of approximately 13.7 million bushels. In June 2011, we acquired approximately 5.1 acres of land in Hopkins,
Missouri with licensed grain storage capacity of approximately 2.0 million bushels and in January 2012, we acquired
approximately 5.8 acres of land in St. Edward, Nebraska with grain storage capacity of approximately 1.9 million bushels.
We believe that the property owned at these sites will be adequate to accommodate our current needs, as well as potential
Marketing and Distribution Segment
Our ethanol, distillers grains and corn oil marketing operations are located at our corporate office, which is discussed
above. BlendStar owns nine acres and leases approximately 19 acres of land in ten locations (with one owned location
currently in development) throughout the south central United States, as disclosed in
Item 1 – Business,
for its blending and
terminaling operations. We believe that the property owned and leased at the locations will be adequate to accommodate our
current needs, as well as potential expansion.
Item 3. Legal Proceedings.
In April 2011, Aventine Renewable Energy, Inc. filed a complaint in the United States Bankruptcy Court for the District
of Delaware in connection with its Chapter 11 bankruptcy naming as defendants Green Plains Renewable Energy, Inc., Green
Plains Obion LLC, Green Plains Bluffton LLC, Green Plains VBV LLC and Green Plains Trade Group LLC. This action
alleges $24.4 million of damages from preferential transfers or, in the alternative, $28.4 million of damages from fraudulent
transfers under an ethanol marketing agreement and an unspecified amount of damages for a continuing breach of a
termination agreement related to rail cars. We are unable to predict the outcome of these matters at this time, and any views
formed as to the viability of these claims or the financial exposure which could result may change as the matters proceed
through their course. We intend to defend these claims vigorously.
Green Plains Bluffton LLC was issued a notice of violation under Section 113(a)(1) of the Clean Air Act by the EPA on
July 1, 2011 for violations of the Indiana State Implementation Plan for exceeding NOx emission limits per hour and for
operation of the thermal oxidizer below the required average temperature pursuant to the Federally Enforceable State
Operating Permit issued to the facility by the Indiana Department of Environmental Management. The EPA has proposed a
fine of approximately $197 thousand though we believe there are mitigating factors that may reduce this amount below such
level once resolved. Furthermore, we believe we may have recourse to the vendor who installed the continuous emissions
monitoring system, the operation of which was the source of the violation.