Tech Company Funded by Texas Gov. Rick Perry Files for Bankruptcy

July 2 , 2012

By: John Clark

A third company that received taxpayer funding through Texas Gov. Rick Perry’s Emerging Technology Fund has filed for Chapter 7 bankruptcy protection, according to a recent report from CBS News.

The latest bankruptcy petition was filed by NanoTailor Inc., which had licensed technology from NASA to build carbon nanotubes to be used in industries as diverse as aeronautics and pharmaceuticals, sources say.

When Gov. Perry decided to extend hundreds of thousands of dollars in taxpayer-funded loans to the company, he reportedly believed that it was making progress, noting that it had only six employees but already had 20 different investors.

But despite the initial high hopes for the tech company, it filed for bankruptcy last month, which gave another black eye to Gov. Perry’s Emerging Technology Fund, which is managed from the governor’s own office.

The fund was created in 2005 and designed to help attract new high-tech companies to Texas. In the last seven years, the fund has given $192 million to 133 companies, so there have been some success stories, but there have also been notable failures.

In 2010, two companies that had received loans from the Emerging Technology Fund filed for bankruptcy. These companies included Thrombovision Inc., which had received a loan of $1.5 million, and StarVision Technologies, which was awarded $750,000.

And prior to their bankruptcy filings, the companies had failed to submit annual financial reports for the last three years, according to a critical state auditor’s report. Supporters of Gov. Perry, however, are quick to note that NanoTailor Inc. received one of the smallest investments issued by the governor’s fund.

And they also note that the company closed its doors after failing to meet the governor’s strict performance expectations. But the failure of NanoTailor Inc. brings the total amount of failed investments issued by the special fund to $2.5 million, which is no small amount, especially in a state where Gov. Perry is facing a tough reelection challenge.

And during his brief run as a presidential candidate, Gov. Perry was highly critical of failed government loans made by President Obama to certain tech companies. So, given the recent failures in Texas, it is likely that this issue will remain hotly debated by members of both political parties.