Did DCED Recover Money From a Bankrupt Company?
Summary of Study
In 2017, Aquion, a company that manufactured renewable energy batteries and received state economic development subsidies, filed for bankruptcy. Pennsylvania Department of Community and Economic Development (DCED) officials stated that they “[would] pursue full recovery of [the development] money in the bankruptcy reorganization proceeding” and “[were] prepared to take whatever steps are necessary and legal under the bankruptcy code to recover our loans.”
Read the full policy brief here.
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Findings:
- The company received an economic development package that included a $2 million Alternative Clean Energy grant; a $5.6 million Opportunity Grant; a $1 million Discovered and Developed in PA grant; a $3 million Alternative Clean Energy loan; and a $5 million Machinery and Equipment Fund loan.
- DCED said $1.2 million has been paid back. In February 2019, a payment of $761,612 was applied to the MELF loan and $463,387 was applied to the Alternative Clean Energy loan. That’s 7.4 percent of the $16.6 million in grants and loans the company directly received.
- Since the money is recaptured by DCED, it likely becomes part of the funds it has to distribute
- Rather than trying to pick winners and losers and providing large amounts of money in questionable subsidies, the commonwealth needs to address its business tax structure, its regulatory environment, and generally improve the state as a place to start and run a business.
Read the full policy brief here.
