NanoTailor Inc. filed for bankruptcy after the state of Texas discontinued taxpayer funding that was part of Gov. Rick Perry's Emerging Technology Fund. By filing Chapter 7, the company has become the third venture boosted by the governor's fund to file for bankruptcy. The company's funding was cut off when it reportedly failed to meet new milestones now required by the state to receive the full investment promised in the original contract.
The total state-sponsored tech fund has resulted in $2.5 million in failed investments so far. However, this is only a small portion of the fund's total portfolio of $192 million. NanoTailor, which had been set up to produce and market NASA-licensed technology for carbon nanotubes for various industries, had received its first award of $250,000 in 2010. However, the state denied the company another $1 million in potential funding when it could not reach the new benchmarks set by the state. State government officials expressed concern about offering more taxpayer money to an under-performing company.
Some have criticized the state government for denying the company the funding. Critics claim that the first $250,000 became a waste of resources since the government was not willing to follow through with the second funding to give the company a chance to provide a return on investment. Others have cited the recent bankruptcy as an argument that the state tech fund was a bad idea in the first place.
By filing a Chapter 7 bankruptcy, the Texas company will be attempting to discharge all of its debts. In this type of filing, the trustee will liquidate all of the company's assets as quickly as possible in order to repay the amounts owed to creditors. There's no word as yet as to how much debt the company is attempting to discharge in its petition.
Source: The Statesman