Northeast Iowa Ethanol V Drizin

In: Business and Management

Submitted By banski
Words 1839
Pages 8
CASE: Northeast Iowa Ethanol, LLC v. Drizin

A) Parties
The plaintiffs involved in this case are the local farmers from Manchester, Iowa. They formed Northeast Iowa Ethanol, LLC. William Ethanol Service and the North Central Construction also invested the construction of the Iowa ethanol plant. The defendant involved in this case is Jerry Drizin. He formed a Nevada corporation, Global Syndicate International Inc.

B) Facts
In 2000 in Manchester, Iowa, farmers and the President of the local Co-op, Douglas Bishop, began meeting with representatives of the United States Department of Agriculture to explore the possibility of building an ethanol plant in the Manchester area. The idea of building the plant was to help farmers in the area in getting more value out of their crops. An ethanol plant produces ethanol and feed grain that is sold at a profit exceeding that associated with the mere sale of grain. The construction of the plant was expected to cost approximately $21 Million (Morlan, editor & publisher; 2006). It would have the room for producing 15 million gallons of ethanol per year. Through the meetings, Mr. Bishop and others raised $2,365,000. Traditional lenders (like the banks) demanded that the plaintiff raise forty percent of the construction costs. It was clear that the plaintiff could not raise $8 Million. The plaintiff's proposed marketing partner, Williams Ethanol Services, agreed to invest $1 Million in the project as well. The contractor anticipated to build the facility, North Central Construction from North Dakota, agreed to invest $500,000 (ia.findacase.com). In all, the plaintiff raised about $3,865,000 for the construction of the plant. In early 2001, Defendant Jerry Drizin set up Defendant Global Syndicate International, Inc. (GSI). Drizin met his partner in GSI, Peter Topol, in February 2001 in Las Vegas, Nevada. GSI was…...

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