A company that once planned to make Indiana home to the largest bioplastics manufacturing facility in the world is going out of business.
Cereplast Inc.’s petition for Chapter 7 bankruptcy was approved last week by an Indiana bankruptcy court.
The public company, which moved its headquarters from El Segundo, Calif., to Seymour a year ago, filed for Chapter 11 reorganization on Feb. 10 to stop a foreclosure that would have occurred the next day.
Secured lender Horizon Technology Finance Corp. filed on Feb. 14 to convert the reorganization to a liquidation in Chapter 7, in which a trustee is appointed automatically to sell assets. The bankruptcy court in New Albany converted the case to a Chapter 7 liquidation on March 27.
In 2007, Cereblast announced it was opening a $7 million plant in Seymour that would make plastic resins from plant starches rather than petroleum. The plant was expected to create 200 jobs and become “the world's largest bio-based plastic resin manufacturing and distribution facility” by 2010.
The Indiana Economic Development Corp. offered Cereplast up to $665,000 in performance-based tax credits and up to $60,000 in training grants. The city of Seymour granted additional incentives.
The company predicted its environmentally friendly resins would become the norm in plastic production, but it struggled to find and keep customers. The plant never reached potential, reaching peak employment of about 50 in 2011.
In 2012, Cereplast lost $30.2 million on sales of less than $1 million, and it began missing debt payments. Sales doubled to nearly $2 million through the first nine months of 2013, but losses grew to $34 million. Employment dwindled to about 20 late last year.
Cereblast shares, which reached highs of nearly $6 in 2011, traded at 3 cents per share Tuesday morning.