XCOR files for Chapter 7 bankruptcy

It’s over for XCOR.

The small aerospace company headquartered in Midland filed for Chapter 7 bankruptcy Wednesday in the Eastern District of California.

Chapter 7 involves liquidating assets to pay off debt. Midland Development Corp. will try to get as much of its investment back as it can, according to Chairman Brent Hilliard.

In 2012, the MDC inked a deal with XCOR worth about $10 million to move the small company to Midland. XCOR’s main draw was the development of the Lynx spaceplane, a suborbital craft that would take off horizontally and land from runways at the now-named and licensed Midland International Air & Space Port.

XCOR in the years since, however, saw CEO and co-founder Jeff Greason released and the Lynx project shelved. The company had several rounds of layoffs, with most employees let go in early July.

Hilliard told the Reporter-Telegram on Thursday that the economic development group is attempting to get a collateralized security interest in XCOR. The MDC took the step of filing uniform commercial code (UCC) financing statements with the Texas, California and Florida secretaries of state Wednesday.

Per the MDC’s contract with XCOR, incentive money was paid upfront without collateral. The deal predates Hilliard’s involvement with the MDC.

The MDC, one of dozens of creditors listed in the bankruptcy filing, is doing everything in its power to recapture any lost money, including attempting to recover its investment by being named on XCOR’s intellectual property, Hilliard said.

Money dried up for XCOR after its subcontract with United Launch Alliance wasn’t renewed this year. In an Oct. 19 interview, acting CEO Michael Blum said the company had weeks to find an investor or it would be forced to file for Chapter 7 and liquidate its assets, according to a report from Space News.

Just days after the interview, Space Florida -- a state-backed economic development agency -- took action against XCOR.

On Oct. 25, Space Florida submitted civil lawsuit filings in Midland County court. On Oct. 31, Judge George D. “Jody” Gilles granted a temporary restraining order against XCOR so that Space Florida can obtain electronically stored information from XCOR’s servers, hard drives and other devices. XCOR did not attend the hearing.

Space Florida enticed XCOR with a $5.7 million deal, according to a 2012 Space News article. XCOR agreed to manufacture and fly the Lynx from Kennedy Space Center.

Space Florida says XCOR owes it more than $3.6 million, according to a court filing.

XCOR’s current assets and liabilities are not yet public. The bankruptcy court on Thursday issued a notice of incomplete filings, among which are a summary of assets and liabilities, a statement of financial affairs and several other documents.

The MDC is funded by the Type A quarter-cent sales tax. The XCOR incentive amounts to about a full year’s worth of collections.