Former Mississippi automaker GreenTech files for bankruptcy in Virginia court

February 28, 2018

 

GreenTech Automotive filed for Chapter 11 bankruptcy in Virginia Monday, blaming hostile media coverage and several federal investigations for its losses.

 

Mississippi taxpayers are among the creditors. The electric car company founded by former Virginia Gov. Terry McAuliffe was given a $3 million loan in 2011 by the Mississippi Development Authority to build its lone manufacturing plant near Tunica.

 

The company shuttered the plant in January 2017, having never met its obligations with the MDA on job creation or capital investment. The automaker was supposed to create 350 jobs and invest $60 million in Tunica, but only created 143 jobs and had only $43 million in investment by the December 2014 deadline.

 

GreenTech's Tunica plant was supposed to build the battery-powered MyCar, which was not certified for use on U.S. roads and was only intended to be sold as a “neighborhood electric vehicle” with a maximum range of only 65 miles per charge.

 

The state of Mississippi and Tunica County, which also provided incentives for GreenTech, are suing the company for $4.8 million. The company says it has debts of between $100 million and $150 million, with a similar amount of assets. 

 

GreenTech blamed a series of 76 stories written by Watchdog.org, which is operated by the Franklin Center for Government and Public Integrity, for having "extremely negative impacts on the governmental, investor and public perception of GreenTech and its business. The company sued the Franklin Center in 2013 for $85 million, but the case was dismissed in 2014.

 

 

 

 

GreenTech also placed blame for its inability to raise further capital on a 2013 investigation into the company's finances by the U.S. Securities and Exchange Commission and a 2015 investigation by the Office of the Inspector General of the Department of Homeland Security.

 

While the SEC investigation didn't result in any fines or indictments, the Homeland Security probe found that Alejandro Mayorkas — who was then director of the U.S. Citizenship and Immigration Services and the deputy secretary of DHS — was using his position to influence the applications of "politically connected" visa seekers that included several Hollywood-based film studios and GreenTech's sister company Gulf Coast Funds Management LLC, which is also listed as part of the bankruptcy filing.

 

Gulf Coast Funds Management was designated a regional center for the EB-5 visa program after then-Gov. Haley Barbour and then-Louisiana Gov. Bobby Jindal wrote separate letters in support of its bid in 2008 to the DHS. Gulf Coast was run by Anthony Rodham, the brother of former presidential candidate and Secretary of State Hillary Clinton.

 

Under the EB-5 program, immigrants who invested $500,000 in a company that created jobs in the U.S. could receive permanent citizenship and GreenTech received $141 million in investment from EB-5 visa holders. A report by state Auditor Stacey Pickering says the company had 86 investors supplying capital to help build GreenTech's Tunica facility.

 

Several of these investors have filed lawsuits against GreenTech and the company has been hit by a $7.5 million judgement in one case, with others pending.

 

McAuliffe later cut his ties to the company in 2012 when he decided to run for governor.

 

 

 

 

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MississippiMatters is a news blog of cooperative writers, videographers and podcasters published by  The Well Writers Guild, a 501c3 devoted to mentoring Mississippi writers and to addressing uncovered or under-covered topics.  MississippiMatters focuses on offering creative "takes" on our state's culture, ideas, events and more.