RELATED PARTY TRANSACTIONS

12 Months Ended

Oct. 31, 2011

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

13. RELATED PARTY TRANSACTIONS

As discussed in Note 10, pursuant to a subscription agreement, Project Viking invested $3.5 million in May 2011  in the Company for 7,000,000 Class B units,  which were subsequently converted to Class A units.

In  July 2010, the Company issued to Project Viking 3,103,449 Class A units at a price per unit of $1.45 for total gross proceeds to the Company of approximately $4.5 million. All proceeds from the sale of the units to Project Viking were used to reduce the principal balance of the Company’s revolving line of credit note with AgStar.

The Company purchased approximately $57,451,000, $43,233,000and $45,266,000 of corn from members in fiscal years 2011, 2010 and 2009, respectively.

Please refer to the section titled “Legal Proceedings” in Note 14 for information on the settlement of the arbitration proceedings between the Company and Fagen, Inc., a related party through its relationship with Project Viking.  In addition, one of the conditions to the effectiveness of the Settlement Agreement was the release of Roland J. Fagen by AgStar from his obligations under his personal guaranty of $3.74 million of the Company’s indebtedness to AgStar under the Company’s master loan agreement.  The effective date of the release of Mr. Fagen’s personal guaranty was July 2, 2010.