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County suing wood pellet company for breach of contract

MAGNOLIA — An Aug. 13 trial date has been set in U.S. District Court in Jackson in a breach-of-contract lawsuit by Pike County against a wood pellet company that never built a promised mill.

The Enterprise-Journal reports Indeck Energy Services of Buffalo Grove, Ill., bought land from Pike County in 2008 with plans to build a $17 million plant that would have employed 20 people.

But the project was abandoned, and county supervisors filed suit in 2010 in Pike County Chancery Court seeking to buy back the 16-acre property for the original $128,400 purchase price.

Indeck countersued when supervisors refused to let it sell the property to Investar, a company supervisors considered “financially insecure,” said board attorney Wayne Dowdy.

The company also was successful in transferring the lawsuit to federal court.

Indeck announced its plans in 2008, riding a wave of interest in biofuels as an alternative energy source and raising local hopes that a new outlet would be available for the then-weak timber market. But natural gas prices plunged, the economy stalled and financing became difficult.

After spending more than $1 million at the property on U.S. 51 in Magnolia, Indeck halted site work, raising concerns by supervisors.

In September 2009, Indeck flew county officials to a mill in Ladysmith, Wis., raising hopes the Pike County plans would go through after all.

But when nothing further developed, supervisors filed suit in December 2010.

 

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