Struggling Charlotte Hybrid Bus Manufacturer Files for Bankruptcy
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Struggling Charlotte Hybrid Bus Manufacturer Files for Bankruptcy

August 26, 2013


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DesignLine, a hybrid bus manufacturer in Charlotte, North Carolina, is filing for bankruptcy protection, according to a report from the Charlotte Observer.

Sources say DesignLine sought debt relief in federal court after trying to solve its financial ills by laying off scores of employees and imposing furloughs on others.

And the bankruptcy filing represents a surprising fall from grace for a once-thriving company that had several "high-profile investors," including former Charlotte Mayor and current U.S. Secretary of Transportation Anthony Foxx, according to sources.

In the bankruptcy petition, the company says it has assets of $14 million and debts of $37.5 million, which explains why it has been desperately seeking financing to continue its operations while it tries to appease its creditors.

According to sources, DesignLine’s biggest creditor is New Jersey Transit, which says DesignLine has failed to deliver $3.6 million worth of buses, despite the fact that New Jersey Transit has already paid for the vehicles.

In addition, Cameron Harris, a prominent North Carolina businessman and initial DesignLine investor, claims that the company owes him nearly $850,000. Harris says the company "didn’t sell enough buses, and perhaps the buses they sold weren’t as good as we thought they were."

Before starting the bankruptcy process, DesignLine’s founder, Buster Glosson, a lieutenant in the United States Air Force, had moved the company to Charlotte in 2006. It had originally been based in New Zealand, sources say.

Glosson, according to reports, also owns a company that is registered to the same address as his home. And this company reportedly claims it is owed $2.9 million by DesignLine. Other creditors dispute this claim.

Sources say DesignLine employed roughly 250 workers at its Charlotte headquarters, but that it recently announced a temporary shutdown of its operations which led to a forced furlough for all its employees. And several employees were also laid off in recent weeks, sources report.

The fight in bankruptcy court with its creditors will likely be interesting. Another investor in the company is Jim Martin, the former governor of North Carolina, who told sources that he hadn’t heard about the bankruptcy filing.

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