Organization, Nature of Business, Basis of Presentation, Liquidity, and Going Concern Considerations	9 Months Ended
Sep. 30, 2012
Organization, Nature Of Business, and Liquidity Considerations [Abstract]
Organization Nature Of Business And Liquidity Considerations [Text Block]	1. Organization, Nature of Business, Basis of Presentation, Liquidity, and Going Concern Considerations *Organization and Nature of Business* BioFuel Energy Corp. (the “Company”, “we”, “our” or “us”) produces and sells ethanol, distillers grain and corn oil through its two ethanol production facilities located in Wood River, Nebraska (“Wood River”) and Fairmont, Minnesota (“Fairmont”). Both facilities, with a combined annual undenatured nameplate production capacity of approximately 220 million gallons per year (“Mmgy”), commenced start-up and began commercial operations in June 2008. At each location Cargill, Incorporated (“Cargill”), with whom we have an extensive commercial relationship, has a strong local presence and owns adjacent grain storage and handling facilities. Cargill provides corn procurement services, purchases the ethanol we produce and provides transportation logistics for our two plants under long-term contracts. In addition, we lease their adjacent grain storage and handling facilities at each of our plants. We were incorporated as a Delaware corporation on April 11, 2006 to invest solely in BioFuel Energy, LLC (the “LLC”), a limited liability company organized on January 25, 2006 to build and operate ethanol production facilities in the Midwestern United States. The Company’s headquarters are located in Denver, Colorado. On June 15, 2012, the Company effected a reverse stock split with respect to all outstanding shares of common stock and Class B common stock at a ratio of one-for-twenty. The Company also split the number of authorized shares of common stock at a ratio of one-for-fourteen, thereby reducing the aggregate number of authorized common stock shares to 10,000,000, and also split the number of authorized shares of Class B common stock at a ratio of one-for-twenty, thereby reducing the aggregate number of authorized Class B common stock shares to 3,750,000. All share and per share information and all necessary par value equity adjustments have been retroactively restated in the financial statements to reflect the effect of this reverse stock split. At September 30, 2012, the Company owned 87.3% of the LLC membership units with the remaining 12.7% owned by certain individuals and by certain investment funds affiliated with some of the original equity investors of the LLC. The Class B common shares of the Company are held by the same individuals and investment funds who held 795,479 membership units in the LLC as of September 30, 2012 that, together with the corresponding Class B shares, can be exchanged for newly issued shares of common stock of the Company on a one-for-one basis. The proportionate value of the LLC membership units held by individuals or entities other than the Company are recorded as noncontrolling interest on the consolidated balance sheets. Holders of shares of Class B common stock have no economic rights but are entitled to one vote for each share held. Shares of Class B common stock are retired upon exchange of the related membership units in the LLC. The aggregate book value of the assets of the LLC at September 30, 2012 and December 31, 2011 was $272.5 million and $309.2 million, respectively, of which substantially all of such assets are collateral for the LLC’s subsidiaries’ obligations under its senior secured bank facility with a group of lenders (the “Senior Debt Facility”) (see Note 5 — Long-Term Debt). The Senior Debt Facility also imposes restrictions on the ability of the LLC’s subsidiaries that own and operate our Wood River and Fairmont plants to pay dividends or make other distributions to us, which restricts our ability to pay dividends. *Basis of Presentation, Liquidity, and Going Concern Considerations* The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern. Our operations and cash flows are subject to wide and unpredictable fluctuations primarily due to changes in commodity prices, specifically, the price of our main commodity input, corn, relative to the price of our main commodity product, ethanol, which is known in the industry as the “crush spread”. The price of our main co-product, distillers grain, is likewise subject to wide, unpredictable fluctuations, typically in conjunction with changes in the price of corn. The prices of these commodities are volatile and beyond our control. As a result of the volatility of the prices for these and other items, our results fluctuate substantially and in ways that are largely beyond our control. As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $11.3 million and $34.8 million during the three and nine months ended September 30, 2012, respectively, due to narrow commodity margins. Narrow commodity margins present a significant risk to our cash flows and liquidity. We have had, and continue to have, limited liquidity, with $10.8 million of cash and cash equivalents as of September 30, 2012. We have relied upon extensions of payment terms by Cargill as an additional source of liquidity and working capital. As of September 30, 2012 we owed Cargill $11.1 million for accounts payable related to corn purchases. Pursuant to an arrangement with Cargill, we have been permitted to extend corn payment terms beyond the $10.0 million contractual limit so long as the amounts Cargill owes us for ethanol exceed the accounts payable balance by an amount that is satisfactory to Cargill. This arrangement may be terminated at any time on little or no notice, in which case we would need to use cash on hand or other sources of liquidity, if available, to fund our operations. Drought conditions in the American Midwest have significantly impacted this year’s corn crop and caused a significant reduction in the corn yield. Since the end of the second quarter, this has led to a significant increase in the price of corn and a corresponding narrowing in the crush spread. The crush spread has narrowed as ethanol prices have not risen correspondingly with rising corn prices, due to an oversupply of ethanol. As a result, the Company announced on September 24, 2012 that it had decided to idle its Fairmont facility until the crush spread improves. In the event crush spreads narrow further, we may choose to curtail operations at our Wood River facility or idle the facility and cease operations altogether until such time as crush spreads improve. We expect fluctuations in the crush spread to continue. Due to our limited and declining liquidity, during the third quarter the Company determined that the two operating subsidiaries of the LLC (the “Operating Subsidiaries”) would not make the regularly-scheduled payments of principal and interest that were due under the outstanding Senior Debt Facility on September 28, 2012, in an aggregate amount of $3.6 million. As a result, the Operating Subsidiaries received a Notice of Default on September 28, 2012 from First National Bank of Omaha, as Administrative Agent for the Senior Debt Facility, concerning the failure to make the regularly-scheduled payments of principal and interest. On November 5, 2012, the Operating Subsidiaries and its lenders entered into a Forbearance Agreement whereby its lenders agreed to forbear from exercising their remedies under the Senior Debt Facility until November 15, 2012. The Company is engaged in active and continuing discussions with its lenders and their advisors regarding the terms of a potential capital infusion into the Operating Subsidiaries. This capital may take the form of a capital contribution from the Company, additional loans, a long-term forbearance or restructuring under the Senior Debt Facility, some combination of the foregoing, or another form yet to be determined. While the Company intends to reach resolution with its lenders with respect to this matter, there can be no assurance it will be able to do so on terms that are favorable or acceptable to the Company, or at all. As of September 30, 2012, the Operating Subsidiaries had $170.5 million of indebtedness outstanding under the Senior Debt Facility. The entire amount outstanding under the Senior Debt Facility has been classified as a current liability in the September 30, 2012 consolidated balance sheet. If the Company is unable to reach an agreement with its lenders under the Senior Debt Facility, and if its lenders successfully exercise their remedies under the Senior Debt Facility, the Company may be unable to continue as a going concern, and could be forced to seek relief from creditors through a filing under the U.S. Bankruptcy Code. Since we commenced operations, we have from time to time entered into derivative financial instruments such as futures contracts, swaps and options contracts with the objective of limiting our exposure to changes in commodities prices. We have only been able to conduct such hedging activities on a limited basis due to our lack of financial resources and we may not have the financial resources to increase or conduct any material hedging activities in the future. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Organization, Nature of Business, Basis of Presentation, Liquidity, and Going Concern Considerations

9 Months Ended

Sep. 30, 2012

Organization, Nature Of Business, and Liquidity Considerations [Abstract]

Organization Nature Of Business And Liquidity Considerations [Text Block]

1. Organization, Nature of Business, Basis of Presentation, Liquidity, and Going Concern Considerations

Organization and Nature of Business

BioFuel Energy Corp. (the “Company”, “we”, “our” or “us”) produces and sells ethanol, distillers grain and corn oil through its two ethanol production facilities located in Wood River, Nebraska (“Wood River”) and Fairmont, Minnesota (“Fairmont”). Both facilities, with a combined annual undenatured nameplate production capacity of approximately 220 million gallons per year (“Mmgy”), commenced start-up and began commercial operations in June 2008. At each location Cargill, Incorporated (“Cargill”), with whom we have an extensive commercial relationship, has a strong local presence and owns adjacent grain storage and handling facilities. Cargill provides corn procurement services, purchases the ethanol we produce and provides transportation logistics for our two plants under long-term contracts. In addition, we lease their adjacent grain storage and handling facilities at each of our plants.

We were incorporated as a Delaware corporation on April 11, 2006 to invest solely in BioFuel Energy, LLC (the “LLC”), a limited liability company organized on January 25, 2006 to build and operate ethanol production facilities in the Midwestern United States. The Company’s headquarters are located in Denver, Colorado.

On June 15, 2012, the Company effected a reverse stock split with respect to all outstanding shares of common stock and Class B common stock at a ratio of one-for-twenty. The Company also split the number of authorized shares of common stock at a ratio of one-for-fourteen, thereby reducing the aggregate number of authorized common stock shares to 10,000,000, and also split the number of authorized shares of Class B common stock at a ratio of one-for-twenty, thereby reducing the aggregate number of authorized Class B common stock shares to 3,750,000. All share and per share information and all necessary par value equity adjustments have been retroactively restated in the financial statements to reflect the effect of this reverse stock split.

At September 30, 2012, the Company owned 87.3% of the LLC membership units with the remaining 12.7% owned by certain individuals and by certain investment funds affiliated with some of the original equity investors of the LLC. The Class B common shares of the Company are held by the same individuals and investment funds who held 795,479 membership units in the LLC as of September 30, 2012 that, together with the corresponding Class B shares, can be exchanged for newly issued shares of common stock of the Company on a one-for-one basis. The proportionate value of the LLC membership units held by individuals or entities other than the Company are recorded as noncontrolling interest on the consolidated balance sheets. Holders of shares of Class B common stock have no economic rights but are entitled to one vote for each share held. Shares of Class B common stock are retired upon exchange of the related membership units in the LLC.

The aggregate book value of the assets of the LLC at September 30, 2012 and December 31, 2011 was $272.5 million and $309.2 million, respectively, of which substantially all of such assets are collateral for the LLC’s subsidiaries’ obligations under its senior secured bank facility with a group of lenders (the “Senior Debt Facility”) (see Note 5 — Long-Term Debt). The Senior Debt Facility also imposes restrictions on the ability of the LLC’s subsidiaries that own and operate our Wood River and Fairmont plants to pay dividends or make other distributions to us, which restricts our ability to pay dividends.

Basis of Presentation, Liquidity, and Going Concern Considerations

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern. Our operations and cash flows are subject to wide and unpredictable fluctuations primarily due to changes in commodity prices, specifically, the price of our main commodity input, corn, relative to the price of our main commodity product, ethanol, which is known in the industry as the “crush spread”. The price of our main co-product, distillers grain, is likewise subject to wide, unpredictable fluctuations, typically in conjunction with changes in the price of corn. The prices of these commodities are volatile and beyond our control. As a result of the volatility of the prices for these and other items, our results fluctuate substantially and in ways that are largely beyond our control. As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $11.3 million and $34.8 million during the three and nine months ended September 30, 2012, respectively, due to narrow commodity margins.

Narrow commodity margins present a significant risk to our cash flows and liquidity. We have had, and continue to have, limited liquidity, with $10.8 million of cash and cash equivalents as of September 30, 2012. We have relied upon extensions of payment terms by Cargill as an additional source of liquidity and working capital. As of September 30, 2012 we owed Cargill $11.1 million for accounts payable related to corn purchases. Pursuant to an arrangement with Cargill, we have been permitted to extend corn payment terms beyond the $10.0 million contractual limit so long as the amounts Cargill owes us for ethanol exceed the accounts payable balance by an amount that is satisfactory to Cargill. This arrangement may be terminated at any time on little or no notice, in which case we would need to use cash on hand or other sources of liquidity, if available, to fund our operations.

Drought conditions in the American Midwest have significantly impacted this year’s corn crop and caused a significant reduction in the corn yield. Since the end of the second quarter, this has led to a significant increase in the price of corn and a corresponding narrowing in the crush spread. The crush spread has narrowed as ethanol prices have not risen correspondingly with rising corn prices, due to an oversupply of ethanol. As a result, the Company announced on September 24, 2012 that it had decided to idle its Fairmont facility until the crush spread improves. In the event crush spreads narrow further, we may choose to curtail operations at our Wood River facility or idle the facility and cease operations altogether until such time as crush spreads improve. We expect fluctuations in the crush spread to continue.

Due to our limited and declining liquidity, during the third quarter the Company determined that the two operating subsidiaries of the LLC (the “Operating Subsidiaries”) would not make the regularly-scheduled payments of principal and interest that were due under the outstanding Senior Debt Facility on September 28, 2012, in an aggregate amount of $3.6 million. As a result, the Operating Subsidiaries received a Notice of Default on September 28, 2012 from First National Bank of Omaha, as Administrative Agent for the Senior Debt Facility, concerning the failure to make the regularly-scheduled payments of principal and interest. On November 5, 2012, the Operating Subsidiaries and its lenders entered into a Forbearance Agreement whereby its lenders agreed to forbear from exercising their remedies under the Senior Debt Facility until November 15, 2012. The Company is engaged in active and continuing discussions with its lenders and their advisors regarding the terms of a potential capital infusion into the Operating Subsidiaries. This capital may take the form of a capital contribution from the Company, additional loans, a long-term forbearance or restructuring under the Senior Debt Facility, some combination of the foregoing, or another form yet to be determined. While the Company intends to reach resolution with its lenders with respect to this matter, there can be no assurance it will be able to do so on terms that are favorable or acceptable to the Company, or at all.

As of September 30, 2012, the Operating Subsidiaries had $170.5 million of indebtedness outstanding under the Senior Debt Facility. The entire amount outstanding under the Senior Debt Facility has been classified as a current liability in the September 30, 2012 consolidated balance sheet. If the Company is unable to reach an agreement with its lenders under the Senior Debt Facility, and if its lenders successfully exercise their remedies under the Senior Debt Facility, the Company may be unable to continue as a going concern, and could be forced to seek relief from creditors through a filing under the U.S. Bankruptcy Code.

Since we commenced operations, we have from time to time entered into derivative financial instruments such as futures contracts, swaps and options contracts with the objective of limiting our exposure to changes in commodities prices. We have only been able to conduct such hedging activities on a limited basis due to our lack of financial resources and we may not have the financial resources to increase or conduct any material hedging activities in the future.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.