If you judge White Stallion Energy by the office building that stands off Cross Pointe Boulevard, you’d never imagine the company could sink into bankruptcy.
The structure looks like a scaled-down White House – a building created out of the same school of thought that brought us that miniature Eifel Tower in Las Vegas.
But this is America. Gilded businesses sputter all the time, only to retreat to the protection of Chapter 11. And that’s just what the company, helmed by GOP megadonor Steve Chancellor, did on Wednesday.
More: White Stallion Energy files for bankruptcy, terminates all 260 employees
The company reportedly blamed COVID-19 and a downturn in the coal industry at large, which was struggling long before the pandemic hit the U.S.
The Wall Street Journal and others reported that White Stallion is about $104 million in debt. According to bankruptcy paperwork filed in Delaware – where White Stallion’s limited liability company is apparently organized – it has somewhere between $100-500 million in liabilities.
And you can find a chunk of those liabilities clearly listed in the forms: $10 million in federal COVID-19 relief money the company received just this spring.
White Stallion snagged millions from the Paycheck Protection Program (PPP): an effort the federal government claimed to gear toward small businesses. The bankruptcy paperwork lists $10,064,818 in “unsecured claims” lent out by Old National Bank.
The PPP money was supposed to help retain jobs. But Wednesday’s news derailed all that. The company fired 260 of its employees, with the caveat that it may rehire about 24 of them.
According to an Indianapolis Star analysis over the summer, White Stallion was among three dozen Indiana fossil fuel companies that nabbed PPP loans.
Several large, non-energy companies did the same. Thanks to a records request, the Treasury Department hacked up reams of data on the program last week. The Washington Post dove into the numbers and found that more than half of the $522 billion the government shelled out “went to bigger businesses, and only 28 percent of the money was distributed in amounts less than $150,000.”
A ProPublica investigation found that some huge companies used sleight of hand to get as many loans as they could.
One example was Vibra Healthcare, a Pennsylvania hospital behemoth with more than $1 billion in annual revenue. It reportedly classified each of its 26 LLCs as separate companies so it could get loans for each one. In the end, it raked in about $97 million.
Meanwhile, several Evansville-area small business owners told the Courier & Press this spring that they struggled to get their hands on PPP funds at all. And even if they could, some were hamstrung by narrow rules over how they could spend the money.
More: Small businesses frustrated, feeling overlooked by Cares Act
According to the bankruptcy paperwork, 80 percent of White Stallion's equity is couched in an LLC, meaning the owners’ individual finances will largely be shielded during the bankruptcy process.
The workers, though, won’t escape unscathed. The company has already said it will halt all its coal mines – including two in Daviess County, Indiana – as White Stallion’s finances weave through the courts.
That means hordes of people are out of a job right before Christmas.
“I heard about it from an employee that they were closing immediately,” Nathan Gabhart, president of the Daviess County Commissioners, told the Washington Times Herald on Thursday. “It sounded pretty brutal. Just cut them all off cold turkey.”
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