On September 28, 2012, BFE Operating Company, LLC, Buffalo Lake Energy, LLC and Pioneer Trail Energy, LLC, which are subsidiaries of BioFuel Energy Corp. (the "Company") received a Notice of Default (the "Notice"), under the Credit Agreement dated as of September 25, 2006 (as amended, supplemented and modified from time to time, the "Credit Agreement"), among BFE Operating Company, LLC, Buffalo Lake Energy, LLC, and Pioneer Trail Energy, LLC (collectively, as "Borrowers"), BFE Operating Company, LLC as Borrowers' Agent, the Lenders party thereto, First National Bank of Omaha, as Administrative Agent, and Deutsche Bank Trust Company Americas, as Collateral Agent.

The Borrowers failed to make the regularly-scheduled payments of principal and interest, in an aggregate amount of $3.6 million, that were due on the outstanding Term Loans under the Credit Agreement on September 28, 2012. The Company, on behalf of the Borrowers, has had, and intends to continue to have, discussions with the Administrative Agent and the Lenders regarding the terms of a potential forbearance, reinstatement and/or restructuring of the Term Loans. As of September 28, 2012, there was an aggregate principal amount of $170.5 million outstanding under the Term Loans.

The above description is only a summary of the assertions made by the Administrative Agent in the Notice and the potential consequences and remedies under the Credit Agreement, and does not purport to be complete. You are advised to refer to the actual Notice, which is attached to this report as Exhibit 99.1 and incorporated by reference herein, and to the terms of the Credit Agreement, which has been filed with the SEC as Exhibit 10.2 to the Company's Amendment #1 to Registration Statement on Form S-1 (file no. 333-139203) on January 24, 2007, for the full details of the terms thereof.

An Event of Default under the Credit Agreement also constitutes an Event of Default under the Lease Agreements (the "Leases") dated as of October 5, 2011, by and between each of Buffalo Lake Energy, LLC and Pioneer Trail Energy, LLC, respectively, and Farnam Street Financial, Inc . ("Farnam"). The Company has informed Farnam of its receipt of the Notice under the Credit Agreement.

(d) Exhibits.

        Exhibit No.                             Description

        99.1          Letter dated September 28, 2012 addressed to BFE Operating
                      Company, LLC, Buffalo Lake Energy, LLC and Pioneer Trail Energy,
                      LLC.