iM3NY: Failed Gigafactory Dream Ends in $10M Fire Sale and 150-Day Dismissal

When iM3NY LLC filed for chapter 11 protection on January 27, 2025, the filing ended a clean energy manufacturing project that had promised to bring jobs to the Southern Tier of New York. The Endicott-based lithium-ion battery startup—founded at the Huron Campus, the "birthplace of IBM"—had secured over $100 million in debt financing and more than $70 million from investors. By January 2025, the company had "exhausted" all current funds, accumulated approximately $136 million in debt and a net operating loss exceeding $142 million, and was left with 22 employees compared with the 2,500 jobs once promised to the region.

The timeline from petition to dismissal was 150 days. Musashi Auto Parts Michigan, Inc., a global automotive supplier founded in 1938, acquired substantially all assets for $10 million on April 4, 2025—a purchase price that did not satisfy the prepetition secured debt owed to HSBC Bank PLC. With no assets available for unsecured creditors and conversion to chapter 7 deemed an unnecessary administrative expense, the Delaware bankruptcy court dismissed the case on June 26, 2025. The filing followed Governor Andrew Cuomo's announcement of a $140 million facility expected to create hundreds of jobs, and unsecured creditors received no recovery.

Debtor(s)	iM3NY LLC
Also Known As	Imperium3 New York
Headquarters	Endicott, New York
Industry	Lithium-Ion Battery Manufacturing
Founded	2017
Founder	Shailesh Upreti (C4V)
Parent Company	Magnis Energy Technologies (ASX: MNS)
Petition Date	January 27, 2025
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-10132 (Lead)
Co-Debtor	Imperium3 New York, Inc.
Employees	22
Total Debt	~$136 million
Net Operating Loss	~$142.6 million
DIP Facility	$4.1M new money + $15M roll-up; lender: HSBC Bank PLC
Buyer	Musashi Auto Parts Michigan, Inc.
Sale Price	$10 million
Sale Closing	April 4, 2025
Table: Case Snapshot

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Gigafactory Origins and Magnis-C4V Ownership

Founding at the birthplace of IBM. In 2017, Shailesh Upreti, chief executive of C4V—a Binghamton, NY-based research and development company with patented battery technologies—formed the Imperium3 consortium alongside several partner firms. The consortium announced a $130 million investment to create a lithium-ion battery gigafactory at the Huron Campus in Endicott, NY—the historic site where IBM once operated. The Endicott plant was intended to be the first of three Imperium3 gigafactories built worldwide, positioning iM3NY to become the first commercial U.S. "giga-scale" lithium-ion battery manufacturing company.

iM3NY held an exclusive North American technology license with C4V. In June 2021, Imperium3 New York produced its first full-sized prismatic cells, incorporating C4V's patented Bio Mineralization technology. The proprietary process produced cells containing no nickel or cobalt.

Ownership structure and Australian connection. Magnis Energy Technologies Limited, an Australian public company listed on the ASX, was the majority stakeholder in iM3NY. According to SEC filings and company disclosures, Magnis held approximately 62.0% of iM3NY's common units and 73.0% of its Class A preferred units. C4V (Charge CCCV LLC) held approximately 31.0% of common units and 26.7% of Class A preferred units, and iM3NY LLC held a 95.5% interest in co-debtor Imperium3 New York, Inc. Under this structure, Magnis was responsible for securing a significant share of the financing needed to bring the gigafactory to commercial scale.

As an ASX-listed company, Magnis was subject to Australian securities disclosure requirements, while iM3NY operated in New York under U.S. regulations. Australian regulators later challenged Magnis's public statements about the U.S. facility's progress and capabilities.

Political backing and job promises. In October 2017, then-Governor Andrew Cuomo announced that the $140 million facility would create more than 230 jobs, with broader expectations that iM3NY would eventually bring 2,500 jobs to the Southern Tier region. Shailesh Upreti initially anticipated that batteries would be manufactured by the end of 2019.

In September 2022, Governor Kathy Hochul announced nearly $114 million in federal and state funding to establish Battery-NY at the Huron campus, led by 2019 Nobel Prize winner M. Stanley Whittingham. These investments supported the New Energy New York (NENY) initiative, with iM3NY positioned as a cornerstone of the regional clean energy ecosystem and direct ties to Binghamton University.

Public funding. iM3NY received over $500,000 in state funding for 2021 and 2022. Empire State Development confirmed that the company was eligible for up to $3.5 million through the Excelsior Jobs Tax Credit Program, from which it drew two disbursements. The company was also eligible for up to $4 million through the Upstate Revitalization Initiative, though it had not claimed or been awarded any portion of that grant before its bankruptcy.

Production Shortfalls and the ASIC Disclosure Suit

Production troubles and regulatory action. Magnis Energy Technologies issued multiple ASX announcements between April 2021 and March 2023 claiming the plant was fully funded to generate at least 1 GWh of battery capacity per year. The Australian Securities and Investments Commission (ASIC) alleges that by January 2023, Magnis and executive chairman Frank Poullas knew these claims were inaccurate.

According to ASIC's civil penalty proceedings, filed in April 2024, the plant was producing about 300 battery cells per day using primarily manual processes, and Magnis failed to disclose material information about the Endicott facility's production capabilities and funding status. The ASIC lawsuit remains pending, and Magnis and Poullas have not admitted to the allegations.

Partner dispute and control loss. The relationship between Magnis and C4V deteriorated as financial pressures mounted. According to investor disclosures, the financial troubles stemmed from a dispute with Magnis over its obligation to fund the gigafactory buildout—capital needed to move from manual pilot production to automated commercial-scale manufacturing. By year-end 2024, Magnis had lost control of Imperium3 New York, and the entity reported a net operating loss of $142.6 million.

The company had raised more than $70 million from investors and more than $100 million in debt. CEO Lukasz Cianciara stated in the First Day Declaration that the company "exhausted" all of its current funds after failing to secure new investment for the battery production plant.

Workforce layoffs and shutdown. Governor Cuomo's 2017 announcement had projected 230 initial jobs with expectations of 2,500 total positions. By mid-2023, only approximately 90 jobs had been created. In October 2024, iM3NY shut down its gigafactory and laid off its entire workforce during a staff meeting, with approximately 50 workers let go at that time. By the January 2025 bankruptcy filing, 22 employees remained to oversee the wind-down. The iM3NY sign was removed from the Endicott facility in 2025.

Chapter 11 Filing and the Musashi Sale

Bankruptcy filing and HSBC capital structure. iM3NY LLC and its co-debtor Imperium3 New York, Inc. filed voluntary chapter 11 petitions on January 27, 2025, in the U.S. Bankruptcy Court for the District of Delaware, jointly administered under case number 25-10132. CEO Lukasz Cianciara's First Day Declaration reported approximately $125.8 million of aggregate principal owed to HSBC Bank PLC under the senior secured financing structure, including emergency bridge funding and accrued interest, plus about $10 million of unsecured trade debt. The debtors were pre-revenue and entered chapter 11 after defaulting under their senior secured credit documents with HSBC and entering into a December 18, 2024 forbearance agreement.

HSBC DIP financing. HSBC, the prepetition secured lender, also provided debtor-in-possession financing consisting of a $17.5 million package: $2.5 million of new-money commitments and a $15.0 million roll-up of prepetition secured debt. The Delaware bankruptcy court approved an interim DIP order on January 29, 2025, two days after the petition. The Final DIP Order, entered February 28, 2025, expanded the new-money piece to $4.1 million while keeping the $15.0 million roll-up and hardwired sale milestones, including a March 24, 2025 binding-agreement deadline, a March 26, 2025 auction date, and an April 1, 2025 sale-order deadline.

Sale process and Musashi bid. The debtors filed a Sale Motion on February 3, 2025, retaining Hilco Corporate Finance, LLC as investment banker, Novo Advisors, LLC as financial advisor, and Chipman Brown Cicero & Cole, LLP as counsel. The court entered the Bidding Procedures Order on February 26, 2025, deeming HSBC a qualifying bidder and consultation party alongside the unsecured creditors' committee, and approved key employee incentive and retention programs during the sale process.

The debtors filed an asset purchase agreement with Musashi Auto Parts Michigan, Inc. on March 31, 2025, and the court entered the Sale Order on April 3, 2025 approving the sale of substantially all assets for $10 million and finding Musashi a good-faith purchaser under section 363(m). The sale included one executory contract and one unexpired lease and closed on April 4, 2025. Musashi is a global automotive supplier founded in 1938 with operations in 14 countries and 34 locations. The $10 million purchase price did not fully satisfy the prepetition secured debt owed to HSBC, leaving nothing for unsecured creditors.

UCC Conversion Motion and Settlement

The U.S. Trustee appointed the Official Committee of Unsecured Creditors on February 12, 2025. The committee retained Seward & Kissel LLP as lead counsel, Potter Anderson & Corroon LLP as Delaware counsel, and Genesis Credit Partners LLC as financial advisor.

On February 19, 2025, the committee filed an omnibus objection to the DIP and bidding procedures, arguing the structure would leave the estates administratively insolvent. It cited a projected $343,000 shortfall by the March 14 bid deadline and a projected $2.2 million shortfall by the end of the DIP budget period, and warned that employee wages and benefits due around the bid deadline could go unpaid.

On February 21, 2025, the committee filed a Motion to Convert the cases to chapter 7 liquidation, less than a month after the petition. The parties ultimately reached a settlement that avoided a contested fight over conversion. The settlement was reached before the case dismissal, and its terms were not publicly detailed.

Case Dismissal and Wind-Down

Reasons for dismissal. Following the April 4, 2025 sale closing, the debtors filed a Motion to Dismiss on April 22, 2025, stating that dismissal would be the most efficient way to conclude the proceedings. The motion cited several factors supporting dismissal over conversion to chapter 7:

• Sale proceeds insufficient: The sale of substantially all assets fell short of anticipated prices and did not fully satisfy the prepetition secured debt owed to HSBC Bank PLC
• No operating business: After the sale closing, the debtors were no longer operating their business
• No plan funding: The debtors lacked sufficient funding to propose a plan of liquidation
• No unsecured creditor recovery: No assets of any value were available for distribution to unsecured creditors
• All cash encumbered: All remaining cash constituted "cash collateral" with no unencumbered assets of material value
• Chapter 7 costs outweigh benefits: Conversion would impose additional administrative costs with no corresponding benefit to creditors

Dismissal order provisions. The bankruptcy court entered the Dismissal Order on June 26, 2025, 150 days after the petition. The order provided exculpation for the debtors; directors, officers, and employees who served during the cases; the debtors' professionals; the Official Committee of Unsecured Creditors and its professionals; and HSBC Bank PLC in its capacity as DIP Lender. The exculpation expressly excludes liability for gross negligence or willful misconduct.

The order also authorized the debtors to wind down under applicable state law rather than under continued bankruptcy court supervision, terminated Stretto, Inc.'s engagement as administrative advisor, and approved Sun Environmental Corporation to handle waste removal from the facility.

Residual asset liquidation. After the going-concern sale to Musashi, the debtors retained Heritage Global Partners, Inc. as auctioneer for the remaining assets under a retention order entered May 9, 2025. The auction results report was filed July 21, 2025, concluding the liquidation of residual property not included in the Musashi transaction.

Creditor Recovery and Contract Dispositions

The bankruptcy produced no recovery for unsecured creditors:

Creditor Class	Treatment
DIP Lender (HSBC Bank PLC)	Secured claims not fully satisfied; retains liens on remaining assets post-dismissal
Prepetition Secured Lenders	Continue to have superior claim on all assets post-dismissal
Unsecured Creditors	No assets available for distribution; zero recovery
Administrative Claimants	Professional fees paid from sale proceeds where available

The $10 million sale price was below the company's total debt of approximately $136 million. After satisfying DIP obligations and administrative expenses, the prepetition secured debt owed to HSBC remained unsatisfied. With all remaining cash encumbered as cash collateral and no unencumbered assets of material value, unsecured creditors received nothing.

Contract disputes. Phoenix Endicott Industrial Investors, LLC and Charge CCCV, LLC filed cure-amount objections during the sale process, and UKG Inc. filed an objection; each was resolved through the sale process. Post-sale, the debtors filed an omnibus rejection motion on May 8, 2025, and the court entered a lease rejection order on May 29, 2025, addressing the remaining executory contracts and unexpired leases.

Professional retentions. The debtors retained Chipman Brown Cicero & Cole, LLP as counsel, Novo Advisors, LLC as financial advisor, Hilco Corporate Finance, LLC as investment banker, and Stretto, Inc. as administrative advisor and claims agent. All retained professionals filed final fee applications in May 2025, with fees paid from available sale proceeds before the case dismissal.

Key Timeline

Date	Event
October 2017	Governor Cuomo announces $140M facility expected to create 230+ jobs
2017	Shailesh Upreti founds iM3NY with $130M consortium investment
2019	Original target for battery manufacturing (missed)
June 2021	First full-sized prismatic cells produced
September 2022	Governor Hochul announces $114M for Battery-NY initiative
January 2023	Plant producing about 300 cells/day using manual processes
Mid-2023	About 90 jobs created (far short of 2,500 promised)
April 2024	ASIC sues Magnis and Frank Poullas for disclosure failures
Late 2024	Magnis loses control of Imperium3 New York
October 2024	iM3NY shuts down gigafactory; lays off about 50 workers
January 27, 2025	Chapter 11 petition filed
January 29, 2025	Interim DIP order entered
February 3, 2025	Sale motion filed
February 12, 2025	Official committee of unsecured creditors appointed
February 19, 2025	Committee files omnibus objection to DIP and bidding procedures
February 21, 2025	Committee files motion to convert to chapter 7
February 26, 2025	Bidding procedures order entered
February 28, 2025	Final DIP order entered
March 31, 2025	APA with Musashi filed
April 3, 2025	Sale order entered ($10M to Musashi)
April 4, 2025	Sale closing completed
April 22, 2025	Motion to dismiss filed
May 9, 2025	Heritage Global Partners retained for residual auction
June 26, 2025	Chapter 11 case dismissed
July 21, 2025	Auction results report filed

Frequently Asked Questions

What was iM3NY?

iM3NY (Imperium3 New York) was a lithium-ion battery manufacturing company based in Endicott, NY, at the Huron Campus—the "birthplace of IBM." The company aimed to be the first commercial U.S. giga-scale battery manufacturing facility, producing cobalt-free batteries using C4V's patented Bio Mineralization technology.

Why did iM3NY file for bankruptcy?

The company "exhausted" all current funds after raising more than $70 million from investors and more than $100 million in debt. It defaulted under its senior secured credit documents with HSBC and entered a December 18, 2024 forbearance before filing. By January 2023, the plant was producing about 300 cells per day using manual processes, and the company could not secure additional financing.

Who bought iM3NY's assets?

Musashi Auto Parts Michigan, Inc., a global automotive supplier founded in 1938 with operations in 14 countries and 34 locations. The purchase price was $10 million.

Did the sale satisfy iM3NY's debts?

No. The $10 million sale did not fully satisfy the prepetition secured debt owed to HSBC Bank PLC, which held approximately $125.8 million in secured principal. Unsecured creditors received nothing.

Why was the case dismissed rather than converted to chapter 7?

The debtors argued dismissal was more cost-effective. Conversion to chapter 7 would impose additional administrative costs with no corresponding benefit since no assets were available for unsecured creditors. The committee's motion to convert was resolved through settlement, allowing dismissal to proceed.

What happened to the promised jobs?

Governor Cuomo announced in 2017 that the facility would create 230 initial jobs, with expectations of 2,500 total positions for the region. By mid-2023, only about 90 jobs had been created. At the bankruptcy filing, 22 employees remained.

Did iM3NY receive public funding?

Yes. The company received over $500,000 in state funding and tax credits, was eligible for up to $3.5 million through the Excelsior Jobs Tax Credit Program (from which it drew two disbursements), and up to $4 million through the Upstate Revitalization Initiative (never claimed).

What was the ASIC lawsuit about?

In April 2024, the Australian Securities and Investments Commission filed civil penalty proceedings against Magnis Energy Technologies and executive chairman Frank Poullas for allegedly failing to disclose material information about the Endicott facility's production problems. ASIC alleges that by January 2023, Magnis knew its public statements about the plant being fully funded for 1 GWh annual production were inaccurate. The case remains pending.

How long did the chapter 11 case last?

150 days, from the petition on January 27, 2025 to dismissal on June 26, 2025. The sale closed on April 4, 2025.

Who is the claims agent for iM3NY?

Stretto, Inc. serves as the administrative advisor and claims agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more bankruptcy case coverage, visit the ElevenFlo bankruptcy blog.