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.

Gigafactory Plans and Origins

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 and which is considered the "birthplace of IBM." The Endicott plant was intended to be the first of three Imperium3 gigafactories built worldwide, positioning iM3NY to become the first commercial U.S.-designed and developed "giga-scale" lithium-ion battery manufacturing company.

The company's mission centered on building lithium-ion batteries as part of a broader commitment to renewable energy. iM3NY held an exclusive North American technology license agreement with C4V, whose environmentally friendly battery technologies distinguished the venture. In June 2021, Imperium3 New York produced its first full-sized prismatic cells, incorporating C4V's patented Bio Mineralization technology. The proprietary BMLMP (bio-mineralized lithium mixed metal phosphate) process produced cells containing no nickel or cobalt, a feature tied to supply chain concerns and ethical issues surrounding cobalt mining.

Ownership structure and Australian connection. Magnis Energy Technologies Limited, an Australian public company listed on the ASX, emerged as 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 retained 31.0% of common units and 26.7% of Class A preferred units. Under this structure, Magnis was responsible for securing a significant share of the financing needed to bring the gigafactory to commercial scale.

The cross-border ownership structure created governance complexity. As an ASX-listed company, Magnis was subject to Australian securities disclosure requirements, while iM3NY operated in New York under U.S. regulations. This dual-jurisdiction arrangement would later become significant when Australian regulators challenged Magnis's public statements about the U.S. facility's progress and capabilities.

Political backing and job promises. The iM3NY project attracted substantial political support. In October 2017, then-Governor Andrew Cuomo announced that the $140 million facility was expected to 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.

The project also connected to broader state and federal clean energy initiatives. 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 Distinguished Professor and 2019 Nobel Prize Winner M. Stanley Whittingham. These investments supported the broader New Energy New York (NENY) initiative, a University-led coalition with the goal of creating a National Hub for Battery Innovation and Manufacturing. iM3NY was positioned as a cornerstone of this regional clean energy ecosystem, with direct ties to Binghamton University.

Public Investment and Use.

The company received public funding before the bankruptcy:

Empire State Development confirmed that iM3NY was eligible for up to $3.5 million through the Excelsior Jobs Tax Credit Program, from which the company 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.

The Path to Bankruptcy

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 its executive chairman Frank Poullas knew these claims were inaccurate.

According to ASIC's civil penalty proceedings, the plant was struggling to produce 300 battery cells per day using primarily manual processes. The regulatory action, filed in April 2024, alleged failures to disclose material information about the Endicott battery facility's actual 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, financial troubles stemmed from a dispute with Australian partner Magnis, which was responsible for securing a significant share of the financing needed to scale operations. The dispute centered on Magnis's obligations to fund the gigafactory buildout—capital that was essential to transitioning 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. Court filings indicate that CEO Lukasz Cianciara explained that the company "exhausted" all of its current funds after failing to secure new investment for the battery production plant.

Magnis's loss of control occurred amid the cross-border ownership structure and financing responsibilities for the U.S. manufacturing operation.

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. As the company's financial position deteriorated, the workforce continued to shrink.

In October 2024, iM3NY shut down its gigafactory and laid off its entire workforce during a staff meeting. Approximately 50 workers were let go at that time. By the January 2025 bankruptcy filing, 22 employees remained to oversee the wind-down process.

The company had encountered a series of financial and production problems since plans were announced in October 2017. The iM3NY sign was removed from the Endicott facility in 2025.

Chapter 11 Proceedings

Bankruptcy Filing.

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. CEO Lukasz Cianciara filed the First Day Declaration explaining the company's financial situation and the circumstances leading to the filing. The cases were jointly administered under case number 25-10132, with Stretto, Inc. serving as the administrative advisor.

The filing came after the company could not secure new funding for its battery production plant. With approximately $136 million in debt, a net operating loss exceeding $142 million, and only 22 employees, iM3NY entered bankruptcy with limited options beyond a sale of substantially all assets.

DIP Financing.

HSBC Bank PLC, which served as the prepetition secured lender, also provided debtor-in-possession financing to fund operations through the sale process:

The Delaware bankruptcy court approved an interim DIP Financing Order on January 29, 2025, just two days after the petition. The Final DIP Order followed on February 28, 2025, providing liquidity to fund operations during the sale process.

Sale Process Timeline.

The debtors marketed assets and sought a buyer:

The company retained Hilco Corporate Finance, LLC as investment banker to conduct the marketing process, with Novo Advisors, LLC serving as financial advisor and Chipman Brown Cicero & Cole, LLP as debtors' counsel. Key employee incentive and retention programs were authorized during the sale process.

Buyer: Musashi Auto Parts Michigan.

Musashi Auto Parts Michigan, Inc. emerged as the successful bidder, acquiring substantially all assets for $10 million under the Sale Order. The sale included one executory contract and one unexpired lease. Musashi is a global automotive supplier founded in 1938 that has expanded into 14 countries with 34 locations.

The sale closed on April 4, 2025, completing the transfer of iM3NY's assets to the new owner. However, the $10 million purchase price fell far short of the company's obligations—the sale did not fully satisfy the prepetition secured debt owed to HSBC Bank PLC, leaving nothing for unsecured creditors.

UCC Motion to Convert and Creditor Settlement

The Official Committee of Unsecured Creditors was appointed promptly after the filing and took an active role in the case, retaining Seward & Kissel LLP as lead counsel, Potter Anderson & Corroon LLP as Delaware counsel, and Genesis Credit Partners LLC as financial advisor. Early in the proceedings, the UCC raised concerns about the viability of the restructuring and the prospects for unsecured creditor recovery.

On February 21, 2025, the UCC filed a Motion to Convert the case to chapter 7 liquidation. The motion came less than a month after the petition.

However, the parties ultimately reached a settlement. iM3NY struck a deal with its unsecured creditors' committee that avoided a fight over conversion to chapter 7. The settlement was reached prior to the case dismissal, allowing the proceedings to conclude without the expense and delay of contested litigation over the chapter 7 issue. The terms of the settlement 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. The company stated that dismissal would be the most efficient and cost-effective 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 chapter 11 petition. The order included several provisions:

Exculpation of estate fiduciaries. The dismissal order provided exculpation for certain parties for actions taken in good faith in connection with the chapter 11 cases. The exculpated parties included:

• The Debtors
• Directors, officers, and employees who served during the cases
• Debtors' professionals
• Official Committee of Unsecured Creditors and its professionals
• HSBC Bank PLC in its capacity as DIP Lender
• DIP Lender's professionals

The exculpation expressly excludes liability for gross negligence or willful misconduct, providing a standard carve-out that preserves potential claims for egregious conduct.

Wind-down authority. The order authorized the debtors to wind down under applicable state law, rather than continuing under bankruptcy court supervision.

Administrative matters. Stretto, Inc.'s engagement as administrative advisor was terminated, and Sun Environmental Corporation was approved to handle waste removal from the facility.

Residual Asset Liquidation.

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

Creditor Treatment and Recovery

The bankruptcy resulted in no recovery for unsecured creditors:

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.

Several parties filed objections to proposed cure amounts during the sale process:

These disputes were 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 remaining executory contracts and unexpired leases.

Professional Retentions

Debtors' Professionals.

UCC Professionals.

All professionals filed final fee applications in May 2025, with fees paid from available sale proceeds before the case dismissal.

Key Timeline

Case Observations

The case provides a record of a battery manufacturing project that raised more than $170 million in combined debt and equity, produced prismatic cells in 2021, and reported 300 cells per day using manual processes by January 2023. The ownership structure split control between Magnis Energy Technologies and C4V, with Magnis responsible for a significant share of financing. The project also received state incentives and was tied to public job projections that were not met before the bankruptcy filing. The case included an ASIC civil penalty proceeding against Magnis and its executive chairman related to disclosure about the Endicott facility, and the chapter 11 case ended after a $10 million asset sale and dismissal.

Frequently Asked Questions

What was iM3NY?

iM3NY (Imperium3 New York) was a lithium-ion battery manufacturing company based in Endicott, NY, at the historic 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. By January 2023, the plant was producing 300 cells per day using manual processes. The company could not secure additional financing for its battery production plant.

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. 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 UCC'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 approximately 90 jobs had been created. At the bankruptcy filing, just 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.

What happened to the Endicott facility?

The iM3NY sign was removed from the building. The assets were sold to Musashi Auto Parts Michigan, and remaining items were auctioned by Heritage Global Partners. Sun Environmental Corporation handled waste removal from the facility.

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.

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