Apr. 18--Problem-plagued Athens Biodiesel is facing foreclosure on its local operation by a California lending institution.

The News Courier has run foreclosure notices on March 31, April 7 and Tuesday stating that the Temecula Valley Bank in Temecula, Calif., has instituted foreclosure proceedings on a loan taken out July 13, 2007.

In early March The News Courier reported Athens Utilities had cut electrical service to the plant off East Airport Road on the site of the old Knight Lumber Co. for non-payment of bills. Melvin Kilgore, owner of Athens Biodiesel, also acknowledged that he was a pay cycle behind in his payroll of about nine remaining employees.

Kilgore subsequently reached an agreement with the city for payment of the company's utility bills.

Three companies -- Key Engineering, Byrd maintenance and Integrity Electric -- have filed suit in Limestone County Circuit Court, claiming "contract disputes."

The company, which opened in September 2006, produced some 100,000 gallons of biodiesel, but fell victim to lower oil prices and a resulting lower demand for its product.

According to the legal notice published in The News Courier, the business is to be auctioned Tuesday in front of the main entrance to the Limestone County Courthouse.

Kilgore said in March the lack of buyers for his product and the lack of promised backing by silent partners had led to his financial problems.

"But Beverly (Mrs. Kilgore) and I are taking the hit and don't involve everybody," said Kilgore in March. "Ultimately, it's our responsibility."

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