Pyrolyx USA Indiana LLC 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 more than $61.14 million in assets, more than $58.5 million is in machinery and equipment and land. Included in that, Pyrolyx lists the value of its plant and land at 4150 E. Steelton Drive in Terre Haute as $7,562,202, according to its bankruptcy court filing.
The company only lists $2,498,658 in cash, cash equivalents and financial assets.
Pyrolyx, a recycled carbon black manufacturer, lists its estimated number of creditors at between 100 to 199.
Under Chapter 7, a bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds to pay creditors.
Pyrolyx first broke ground in Terre Haute in August 2017 on its current facility, after closing on $30.18 million of Economic Development Solid Waste Facility Revenue Bonds used to construct its plant in Terre Haute.
The company in 2019 completed its 66,000 square feet, three-level plant on East Steelton Ave., which the company touted as the largest facility of its kind in the world. Construction costs for that facility was about $25 million.
However, in December, 2019, Zeppelin Systems USA filed a lawsuit arguing Pyrolyx still owes that company more than $5.5 million and contended Pyrolyx failed to perform a timely hazardous area classification that delayed work. It also said Pyrolyx lacked a complete functional description for equipment Zeppelin supplied for the project. A mechanics lien was also filed.
Also in December, 2019, the Terre Haute Economic Development Corp. approved the issuance of up to $70 million of Solid Waste Facility revenue bonds to construct a second recycling plant, with the city of Terre Haute approving the bond issue in January.
In January, Kirk Grable, attorney for Barnes & Thornburg, told the Terre Haute City Council that, like the first bond issue to Pyrolyx, the solid waste facility revenue bonds are a type of nongovernmental bond authorized under the Internal Revenue code in limited amounts and for the purpose of disposing of solid waste.
Grable said the Internal Revenue Service requires that a political subdivision, such as the city of Terre Haute, to issue the bonds, which would then allow interest on those bonds to be excluded from gross income for federal income tax purposes.
Grable stressed to the council 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. It would be the risk bond holders would have to accept, Grable said.
Just four months later, Pyrolyx USA Indiana in April notified federal regulators it was defaulting on its municipal bond issued in 2017 after closing its Terre Haute plant, attributing its action to the COVID-19 pandemic.