Oil-Waste Recycling Business Backed by Muni Bonds Goes Bankrupt

The owner of a Texas facility that recycles metals extracted from oil-refinery waste filed for bankruptcy after the venture was marred by equipment failures and commodity price volatility.

Aleon Metals LLC, which is responsible for $294 million of municipal debt that financed the construction of the recycling plant and another under development, filed for Chapter 11 Sunday in US Bankruptcy Court for the Southern District of Texas.

Aleon said it secured $188 million of financing from bondholders to continue operations while it seeks a buyer during the bankruptcy proceedings. Jefferies Financial Group Inc., Aleon’s investment banker, will ...