ARLINGTON — MicroGreen Polymers sold millions of plastic cups made from recycled material, but it couldn’t make enough to cover its debts.
The clean-tech startup suddenly closed Friday, putting about 150 employees out of work.
One of its largest backers, the Confederated Tribes of the Grand Ronde in Oregon, is foreclosing on the company, which did not respond to requests for comment.
In all, the tribes put $18 million into MicroGreen in 2013. That included $10 million in equity investment and an $8 million loan in December made through Ilihi, a subsidiary of the tribes.
At the time, the tribes touted the investments, and the Native American Finance Officers Association gave the tribes its Deal of the Year Award.
But “MicroGreen was not able to meet its financial obligations,” said Titu Asghar, the economic development director of the Confederated Tribes. “They’d been behind for a while on monthly payments” on the $8 million loan from Ilihi.
“We were surprised that the company was not able to sell enough products,” he said.
MicroGreen was supplying eco-friendly, lightweight cups to air carriers including Alaska Airlines, Allegiant Air, Virgin America and United Airlines.
The company estimated the potential global market for such plastic products was $50 billion, and commercial air carriers were a small slice of that, according to MicroGreen’s website.
“They were able to make sales but not a profit,” Asghar said.
The tribes are moving ahead with foreclosure and will sell off MicroGreen’s assets to cover debts he said.
It is not clear if or how much the company might owe other lenders. It had raised more than $40 million from investors, which included the Stillaguamish Tribe and recycling and trash giant Waste Management. The company’s assets include production equipment and, apparently, a building in the Jensen Business Park in Arlington near Highway 9, which has an assessed value of $5.7 million, according to Snohomish County property records.
A couple of cars were parked outside the building on Tuesday. A piece of yellow paper taped to the front door said, “MicroGreen Polymers, Inc. has ceased operations until further notice.”
A man answered a knock and said he would pass along a request for comment. However, the company did not reply by late Tuesday.
MicroGreen was founded in 2002 by Krishna Nadella, who had been a doctoral student in mechanical engineering at the University of Washington.
The company has been in Arlington for most of its existence, said Arlington Mayor Barbara Tolbert.
The CEO until recently had been Tom Malone, who left the company shortly before a visit by Gov. Jay Inslee in January, said Tolbert, who accompanied the governor on his tour.
Malone did not return messages left on his cellphone.
The company in recent months was talking about growth, not closure.
During Inslee’s visit, executives said they expected production to increase and expressed support for improving Highway 531, which connects to I-5, to handle additional shipments.
During a meeting in December with Seattle-based private individual investors, company officials did not indicate that MicroGreen was in financial trouble, said a person who attended the meeting.
WorkForce Snohomish said it has asked the company for permission to hold information sessions for now-out-of-work employees about unemployment insurance, job services and other resources.
While MicroGreen is being gutted to cover debts, it is not necessarily the end, said Asghar, the tribes’ economic development director.
“The technology works, we know that,” he said. “Maybe whoever buys the company can make it work.”
Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.
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