Staff Writer - CheersandGears.com
June 19, 2013
Another automaker bites the dust. Carbon Motors, the company behind the futuristic E7 police vehicle has filled for chapter seven bankruptcy (i.e. liquidation) last Friday.
The Indianapolis Business Journal says the company's bankruptcy paperworks lists liabilities of $21.7 million and assets of just $18,976. Those assets include one E7 prototype, some furniture, books, and intellectual property.
Carbon Motor's business plan hinged upon getting a $310 million loan from U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program. Last March, the Department of Energy declined their application. CEO William Santana Li said at the time the company was a victim of politics and would be looking elsewhere for money. It seems their search didn't work since there has been radio silence and the company quietly pulled out of its plant in Connerville, Indiana back in April.
“The entire business model was premised on that entire loan coming through. It was a huge, unexpected disappointment for management as well as the investors,” said Henry Efroymson, a partner at Ice Miller LLP, who is representing Carbon Motors.
Many of the liabilities in Carbon Motor's filling are from investors and suppliers, such as BMW which would have supplied a diesel engine for the vehicle.
The chapter seven bankruptcy also gives the company protection from any litigation brought against the company, such as three former executives suing the company for unpaid wages.