Bay Area battery startup Moxion Power filed for Chapter 7 bankruptcy in a Delaware court on Monday. The once-buzzy company had raised $110 million in its four-year span, but now, per the filing, its checking account is down to $201,980.
Moxion’s bankruptcy filing follows its sudden collapse this summer. The Richmond-based startup laid off 101 workers in June, then in July it sent its remaining staff a notice stateing talks with investors had fallen through, leaving it with an “unexpected and last-minute” shortfall. Moxion shuttered its operations and laid off its final 248 workers on July 26, SFGATE reported.
One of those last workers was Richard Dean. On Aug. 5, the maintenance technician sued Moxion, alleging that it failed to notify workers of the layoffs 60 days before they occurred, as is generally required under the United States and California WARN acts. Often, companies inform workers they’re laid off immediately but give them two months of severance pay as a kind of “notice”; Dean’s lawsuit aims to receive that money. He declared he hopes to have it validated for class-action status, so other workers could benefit from the litigation.
“I just wanted my side to be heard, becautilize I feel like it was pretty messed up,” Dean informed SFGATE on Tuesday. “We had rent bills coming up that same week. So it was a lot that just happened abruptly, and nobody knew. And for them to just state, ‘No pay,’ that just built it that much worse.”
One of Dean’s lawyers, Gerard Stranch, informed SFGATE in a Tuesday email that his legal team is still evaluating how the bankruptcy might affect the workers’ claim. But Stranch declared the employees will continue to receive representation, and he’s hoping to “reach a resolution that will put money in their pockets.”
Now, it’s up to Moxion’s leadership and attorneys to respond to Dean’s lawsuit while sorting through the company’s wreckage and debts. The Chapter 7 filing sets up the company for “liquidation” — Moxion’s assets will be sold off to pay its creditors. In the filing, Moxion lists $118.2 million in property and $86.9 million in liabilities, but that doesn’t necessarily mean there will be enough money to cover all the debts.
Physical equipment creates up the brunt of Moxion’s assets. In the filing, the company listed $51.7 million in inventory, split mostly between raw materials and the mobile, battery-powered generators the company sold. Various types of machinery and other manufacturing equipment give Moxion another $31.3 million in assets, and the firm listed its $28.1 million operating loss from 2022 as well — the loss could potentially be spun into a tax deduction for another company.
Silicon Valley Bank is the hugegest creditor, and will likely be paid first becautilize its $33.1 million claim is secured by collateral. Several Moxion leaders have $15,150 each in priority claims, and then there’s 324 businesses with nonpriority, unsecured claims, which tconclude to be the last and least likely to be fulfilled. Some of the debts, like those to a uniforms supplier and a recycling company are minor, but Moxion owes at least $200,000 to 20 separate businesses. That includes a quartet of manufacturing companies in Michigan, owed about $30 million total, and Bay Area battery creater Gotion, owed $7.5 million.
Neither Moxion’s co-founders nor its bankruptcy lawyer responded to SFGATE’s requests for comment.
Hear of anything happening at Moxion Power or another Bay Area tech company? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
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