Investors get $4.5M in biofuel case under federal settlement

The Associated Press

ACKSON, Miss. — A federal judge has approved a $4.5 million settlement for private shareholders of a failed biofuel maker.

U.S. District Judge Lee Rosenthal issued the order Monday in Houston approving the settlement, which is to partially compensate 23,000 shareholders for money they lost because of drops in KiOR’s stock price. Lawyers are set to receive $1.5 million of the $4.5 million, plus expenses.

Former KiOR CEO Fred Cannon, lead investor Vinod Khosla and another man are to pay the money under the settlement.

Mississippi Attorney General Jim Hood is separately suing Cannon, Khosla and others in state court, demanding repayment of $77 million plus interest. Mississippi loaned the money to KiOR, which built a biofuel plant in Columbus. The plant never operated as planned.