Pyrolyx USA Indiana LLC on Thursday filed for Chapter 7 bankruptcy — a liquidation bankruptcy — in the U.S. Bankruptcy Court District of Delaware.
The company lists debt to creditors at more than $49.9 million.
While the company lists over $61.14 million in assets, over $58.5 million is in machinery, equipment and land. Included in that, Pyrolyx lists the value of its plant and land at 4150 E. Steelton Drive in Terre Haute at $7,562,202, according to its bankruptcy filing.
The company only lists $2,498,658 in cash, cash equivalents and financial assets.
Pyrolyx, a maker of recycled carbon black, lists its estimated number of creditors at between 100 and 199.
Under Chapter 7, a trustee in bankruptcy collects and sells the debtor’s non-exempt assets and uses the proceeds to pay creditors.
Pyrolyx first broke ground in Terre Haute in August 2017 on its current facility, after closing $30.18 million in revenue bonds for the economic development solid waste management facility used to build its factory in Terre Haute.
In 2019, the company completed its 66,000-square-foot, three-level factory on East Steelton Ave., which the company touted as the largest such facility in the world. The construction costs for this facility were approximately $25 million.
However, in December 2019, Zeppelin Systems USA filed a lawsuit claiming that Pyrolyx still owed that company more than $5.5 million and argued that Pyrolyx failed to timely perform a hazardous area classification. which had delayed the work. He also said that Pyrolyx did not have a complete functional description of the equipment supplied by Zeppelin for the project. A mechanic’s lien was also filed.
Also in December 2019, the Terre Haute Economic Development Corp. approved the issuance of up to $70 million in revenue bonds for the solid waste management facility to build a second recycling plant, with the city of Terre Haute approving the bond issuance in January.
In January, Kirk Grable, attorney for Barnes & Thornburg, told Terre Haute City Council that, like Pyrolyx’s first bond issue, solid waste facility revenue bonds are a type of non-government bond. permitted under the tax code in limited quantities and for the purpose of solid waste disposal.
Grable said the Internal Revenue Service requires a political subdivision, such as the city of Terre Haute, to issue the bonds, which would then allow the interest on those bonds to be excluded from gross income for federal tax purposes. on income.
Grable pointed out to the board that although the city would be the bond issuer, it would not be liable for any debt even if Pyrolyx were to default on bond payments. That would be the risk bondholders would have to accept, Grable said.
Just four months later, Pyrolyx USA Indiana notified federal regulators in April that it was defaulting on its municipal bond issued in 2017 after its Terre Haute plant closed, blaming the action on the COVID-19 pandemic.