Minneapolis-based Global Ethanol is suing Andover, Kan.-based Presta Oil, alleging the company failed to fulfill a contract to purchase ethanol, the Wichita Eagle reported.
The lawsuit states that Presta Oil neglected to pay for shipments of ethanol in 2008 valued at more than $205,000, and refused to accept seven shipments of ethanol later in 2008 valued at almost $393,000.
According to the lawsuit, Malwina Caban, Global’s vice president for finance and risk control, contacted Terry Presta, president of Presta Oil, in January about the missed payments and refused shipments and Presta said the sale and leaseback of several Presto service stations would allow the company to pay Global Ethanol.
The companies reached an agreement to cover the three unpaid and seven undelivered shipments. Presta would pay $347,000 exclusive of any interest owned on the three unpaid shipments, with the balance due by April 15 if the service stations were sold.
If the stations didn’t sell Presta would pay $25,000 per month plus 10% annual interest until the balance was paid.
The stations didn’t sell, according to the suit, and Global Ethanol has only received $40,000 toward the balance.
The suit was filed in Hennepin County District Court in Minnesota.