The bankruptcy case of Springdale-based nanotechnology manufacturer NanoMech Inc. looks to be coming to a close with a settlement that will clear its former CEO of financial wrongdoing, according to a news release.
NanoMech filed paperwork Wednesday (March 18) seeking a settlement in the case that’s expected to lead to its dismissal, the release shows.
NanoMech filed April 15, 2019, for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The bankruptcy filing allows for a company to reorganize its debt and came after New York-based lender Michaelson Capital Partners sued NanoMech for not making payments on nearly $7 million in loans. It also came after Jim Phillips, former chairman and CEO of the NanoMech, retired from the company.
The settlement will resolve and eliminate any issues over why the company when into bankruptcy, according to the release.
Last year, NanoMech hired a company to investigate the business’s operations and finances, including the eight years that Phillips oversaw the company. The company’s board of directors completed the review and determined that under Phillip’s leadership, NanoMech “appropriately addressed the many challenges it faced as an investment-stage company and that there was no wrongdoing associated with Mr. Phillips’ stewardships, the performance of Mr. Phillips and the other pre-bankruptcy directors and officers or with Mr. Phillips’ retirement from the company.”
NanoMech previously claimed Phillips spent more than $750,000 of the company’s money on personal expenses and overseas trips while he was CEO. Phillips denied the claims of financial wrongdoing and said the trips were work-related.
“During his tenure, Mr. Phillips made significant headway with many key milestones in diligently building the company towards maturity in the early stage nanotechnology manufacturing era,” NanoMech CEO Ben Waisbren said. The company’s board of directors retained Waisbren as chief restructuring officer after it was sued twice for not making payments on nearly $10 million in loans.
“I had the opportunity to witness Jim’s entrepreneurial skills and non-stop dedication to building NanoMech from a research entity to a producer of products contending with some of the largest companies in the world, in industries important to America’s competitiveness in science and innovation,” said longtime director Deborah Wince Smith.
A subsidiary of Houston-based petrochemical company Vinmar International acquired the operational assets of NanoMech on Aug. 1 after agreeing to bid up to $13.09 million for the company. Following the acquisition, NanoMech was renamed to VinTech Nano Materials LLC.
Phillips is now chairman and CEO of The Covenant Business Group LLC, an internationally focused company involved in bringing new companies and innovations to market in multiple emerging technology platforms. He provided the following statement to Talk Business & Politics:
“My wife and I have had our faith to get us through the most awful slander, libel and defamation, caused by incredible lies and bogus reports that set new records in false statements and fabrications.
“I have spent the last year working on new scientific breakthroughs that we are launching through TheCovenantBusinessGroup.com.
“We are finalizing our QuShell, that is superior cement, and many other new materials. QuMask is an effort to build far more effective next generation protective face masks for the global public safety that are very inexpensive and plentiful.
“Before retiring after over 10 years, much of the time without compensation, all the while investing my own capital alongside terrific entrepreneurs, I had the opportunity to work with extraordinary innovators that created breakthrough and proven technologies and products that consistently outperformed much larger well-known companies and brands. I absolutely believed in the company’s excellent future and amazing innovations when I retired.”