Biofuel Case: $4.5M for Investors under Federal Settlement
by Jeff Amy (Fox Business/Associated Press) A federal judge has approved a $4.5 million settlement for private shareholders of failed biofuel maker KiOR, and a lawsuit by the state of Mississippi seeking to recover a much larger amount continues.
U.S. District Judge Lee Rosenthal issued the order Monday in Houston approving the settlement, intended to partially compensate 23,000 shareholders for money they lost because of decreases in KiOR’s stock price.
Former KiOR CEO Fred Cannon, lead investor Vinod Khosla and former Chief Financial Officer John Karnes are to pay the money under the settlement. Lawyers are to receive $1.5 million of the $4.5 million, plus expenses.
Separately, Mississippi Attorney General Jim Hood is suing Cannon, Khosla and others in state court in Jackson, demanding repayment of $77 million, plus interest. Mississippi loaned $75 money to KiOR, which built a biofuel plant in Columbus.
Cannon and the company that Khosla reorganized to succeed KiOR after it filed for bankruptcy in 2014 paid a $100,000 fine to the Securities and Exchange Commission last year to settle allegations that the company misled investors about how much biocrude the company was able to make from wood. READ MORE