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.