MicroGreen’s sudden closure leaves 163 jobless and shocked

ARLINGTON — Former employees of MicroGreen Polymers are trying to figure out what comes after the clean-tech startup company suddenly closed its doors earlier this month.

About 30 of the company’s former workforce of 163 attended a two-hour session last week about job-search resources and unemployment insurance. The event was hosted by Workforce Snohomish.

Most lingered at the Arlington Boys &Girls Club to talk and comfort each other. Some said they were still in shock at how quickly the company came undone.

A state agency says MicroGreen did not follow federal rules that require advance notice of a layoff. The company’s founder, meanwhile, apparently has moved on to a new venture.

Like many startups, MicroGreen relied on cash infusions from investors, and it had growing pains as it increased production to meet major airlines’ orders for its insulated InCycle Cup.

But the end came so quickly, said some employees, that they were not paid in full on April 3 when managers handed out final checks after announcing that day the company was closing.

A contractor said that she tried this month to deposit a check from MicroGreen but was told that its bank account had been blocked.

As of last week, the company still owed employees about $20,000 in expenses, said one former manager.

On April 1, one of the company’s main lenders, the Confederated Tribes of the Grand Ronde in Oregon, called an $8 million loan it made to MicroGreen in 2013. The loan had been made through the tribes’ investment vehicle, Ilihi.

In all, the tribes put $31 million into MicroGreen, most of which was in the form of direct investment, not loans.

The tribes did not immediately respond to a request for comment Friday about the outstanding financial obligations of MicroGreen.

In the rush to close down, the company never filed a worker adjustment and retraining notification with the state, said Janelle Guthrie, a spokeswoman for the Employment Security Department. Under federal law, companies are required to file such notice 60 days before a worker is laid off.

Failure to do so can result in companies having to pay penalties to affected workers. But for that to happen, a worker has to file a complaint in U.S. District Court, which enforces the requirements, she said.

The sudden closure had some employees wondering how they will make ends meet.

“I’ve got nothing coming in,” said Jim Stockwell, a former hourly worker at MicroGreen. “I’ve got to make a car payment. I’ve got to pay rent.”

He joined the company last fall. He said he was attracted by the benefits — something he didn’t have at his previous job — and the chance to get in early at a company that had seemingly limitless potential.

MicroGreen was supplying eco-friendly, lightweight cups to air carriers including Alaska Airlines, Allegiant Air, Virgin America and United Airlines.

Commercial air carriers made up a thin slice of the potential global market for plastic products using the company’s technology. The market’s worth was an estimated $50 billion, according to MicroGreen’s website.

While many of the company’s 163 employees figure out unemployment insurance and start job searches, MicroGreen’s founder, Krishna Nadella has already started a new company, according to his LinkedIn account. His profile on the professional networking site lists him as founder of a company called Aiooa as of this month.

A handful of former MicroGreen employees are also connected to Aiooa on LinkedIn.

No further information about the company is available online, and Nadella did not respond to a request for an interview about the new venture.

MicroGreen grew out of technology Nadella researched as a doctoral student in mechanical engineering at the University of Washington. He founded the company with two fellow UW students in 2002.

Among Nadella’s biggest fans are some former hourly wage workers at MicroGreen. They said they would go back to work for him in a heartbeat.

They described him as a visionary leader who also deeply cared about his employees.

“I would do anything for Mr. Nadella,” Stockwell said.

Other employees echoed his comment.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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