Carbon Motors’ Chapter 7 filing marks official end for firm

Back to TopCommentsE-mailPrintBookmark and Share

A once-promising company that had planned to build high-tech police cars at a Connersville plant in eastern Indiana is officially kaput.

Carbon Motors Corp. filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Indianapolis on Friday, listing liabilities of $21.7 million and assets of just $18,976.

The assets consist of a prototype police car, miscellaneous furniture, books and records, and the company’s intellectual property, said Henry Efroymson, a partner at Ice Miller LLP, who is representing the company.

Much of the liabilities listed in the bankruptcy are claims from investors who had sunk millions of dollars into the company. Among the biggest claims: $3.6 million from Chicago billionaire Joe Mansueto, the founder and CEO of investment research firm Morningstar Inc.

Other debtors include German car company BMW and Troy, Mich.-based Inteva Products LLC, both suppliers to Carbon Motors, who claim they are owed more than $3 million between them.

The company fell apart after the U.S. Department of Energy rejected the company’s request for a $310 million loan last year.

“The entire business model was premised on that entire loan coming through,” Efroymson said. “It was a huge, unexpected disappointment for management as well as the investors.”

Carbon Motors announced in July 2009 that it would move into the vacant Visteon plant in Connersville, hire as many as 1,500 workers and begin making the high-tech police cars.

But the entire operation largely hinged on the government loan, which the Department of Energy denied in March 2012.

For Carbon Motors, the bankruptcy protects it from any litigation brought against the company, including a lawsuit filed in May by three former executive vice presidents seeking more than $600,000 in deferred wages.

The Connersville News-Examiner reported on May 22 that Trevor Rudderham, Alan Bratt and Keith Marchiando were suing in Fayette Circuit Court to collect back wages that they claimed the defunct company had promised to pay them by March 1.


  • Hoax
    Carbon Motors NEVER was promising! This was designed as a scam to obtain government money and then go bankrupt. We should be thankful they were turned down for Federal $$$.
  • Totally agree Tom
    I totally agree Tom. I'm a lifelong Connersville resident (please don't hold that against me) who said from Day 1 that the 'Phantom Motors' thing would never materialize. Santana Li and Connersville Mayor Leonard Urban called us doubters "naysayers" and worse, but who is getting investigated by the FBI? Not the naysayers, but the 'willing' participants in this total scam. I sure wish / hope the Indianapolis Star is continuing its investigation of 'Connersville government.' So many things that 'might be improper.' - kh
  • Your Right Rad
    Kinda like the governments money losing green energy subsidies. Rape and Pillage the taxpayer.
  • bad idea
    Carbon Motors was a scam from the beginning. No police department would buy a whole fleet of high priced specialty vehicles from an upstart company. Had the federal loan been approved the executives and initial investors would have made more, but the federal government would have had nothing but empty promises to show for that $310 million dollar loan.
    • Agreed
      They should of tried Police Bikes, Feds gave $1.5 million for a Bike rental company!
    • Smoke & Mirrors
      This police car was never a viable proposition. It was too complicated, too expensive for any police department, too restrictive (only factory service locations could work on it) and too foreign. A puff job from the beginning and as the years went on, even the vaunted technology got mouldy. I don't belive there was any real possibility of it being built, much less sold, and the government rejection of the loan was certainly prudent (and a convenient excuse to oshut off the life support).

      Post a comment to this story

      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
      You are legally responsible for what you post and your anonymity is not guaranteed.
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by

      facebook - twitter on Facebook & Twitter

      Follow on TwitterFollow IBJ on Facebook:
      Follow on TwitterFollow IBJ's Tweets on these topics:
      Subscribe to IBJ
      1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

      2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

      3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

      4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

      5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............