Plastics Recycling Update Magazine: Assets of recycled cup manufacturer to be auctioned

Assets of recycled cup manufacturer to be auctioned

By Jared Paben, Plastics Recycling Update

September 10, 2015

A recycled cup manufacturer that abruptly closed its doors in April had for a long time failed to turn a profit and pay its bills, court records show. Now, an auction has been scheduled to sell off equipment and supplies once owned by Arlington, Wash.-based MicroGreen Polymers.

The company, founded in 2002, produced its InCycle cups made of 50 percent recycled PET. Its high-profile customers included Virgin Airlines, United Airlines and Alaska Airlines. The company garnered $40 million in investment funding before its abrupt closure.

The company was investing in equipment as late as at least March 2014, when it landed $10 million to allow it to increase production of its cups five-fold. Much of the equipment up for auction was purchased only last year.

Long struggled

The company had long struggled to turn a profit, David Lawyer, an attorney who formerly represented the company, wrote in court documents.

"During its entire history, MicroGreen has subsidized its business operations through private investment financing, because its business revenues have never been sufficient to cover its operating costs," he wrote.

That statement was based on conversations with the former CEO of the company and a review of hundreds of pages of documentation, he wrote.

MicroGreen's biggest creditor, at about $18 million, is Oregon's Confederated Tribes of Grand Ronde. The tribe foreclosed on and took control of all of MicroGreen's assets with the expectation it would later liquidate them, Lawyer wrote.

On July 28, a U.S. District Court judge ruled that MicroGreen owes KeyBanc Capital Assets $770,000 in unpaid fees and expenses. KeyBanc had signed an agreement to assist MicroGreen in selling $25 million in company stock. MicroGreen failed to pay invoices for services as far back as March 2012, attorneys for KeyBanc Capital Assets wrote in court documents.

Auction scheduled

Auction company The Branford Group has scheduled a webcast auction on Sept. 30 to sell the assets on behalf of secured lenders. The assets include nearly new thermoforming and extrusion lines, printing and packaging, plastic support and more, according to the company.

"Most of the equipment being offered was purchased new in 2014," according to The Branford Group.

The intellectual property, tooling packaging and mold will also be available for sale.

The sale will not include the building or land, Andrew Duncan, vice president of business development for The Branford Group, told Plastics Recycling Update.

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