Beleaguered Italian bioplastics company Bio-On SpA has announced bankruptcy following a Dec. 20 court decision in Bologna, Italy.
The court also ordered the "temporary continuation" of the company's economic activity in order to maintain business continuity and avoid the dissolution of the firm, Bio-On said in a statement.
The statement went on to note the banking system's "lack of willingness" to grant new financial facilities, adding that the payment of the salaries of the employees could only be possible after receiving new credit.
Bio-On came under severe financial pressure and legal investigation following a report in July by the New York-based asset management firm Quintessential Capital Management, which claimed Bio-On was "a house of cards, a scheme conceived by management to enrich themselves on at the expense of shareholders."
In November, the company announced that it was suspending any type of payment, including to employees, suppliers and credit institutions, due to an ongoing judicial investigation into its performance.
Based in Bologna, Bio-On is commercializing polyhydroxyalkanoate (PHA) resins, a biodegradable polyester made by bacterial fermentation.