Before electric car battery maker A123 declared bankruptcy earlier this week, there was Solyndra. And before Solyndra there was Green Vehicles, another green-tech company backed by government funds that promised to create jobs and transform industry. 


The city of Salinas sued the electric car maker in August 2011, seeking $534,500 the city contributed to help rev the startup into action. Days later, Green Vehicles filed for Chapter 7 bankruptcy. 


Federal Bankruptcy Trustee (and supervisorial candidate) Marc Del Piero hired a forensic accounting specialist to look for hidden Green Vehicles money. But after poring over two years’ of bank records, he found nothing but a dwindling balance. “We had suspicions, but the suspicions didn’t prove out,” he says. 


Del Piero found no assets to distribute to creditors (including the city and a bookkeeper seeking unpaid wages), and concluded his investigation on Sept. 10. 


“We’re not surprised by that,” Salinas City Attorney Vanessa Vallarta says. “Now we will focus on civil court.” 


And most recently, that means watching the principals of Green Vehicles sue each other. In a complaint filed Oct. 9 in Monterey County Superior Court, founder Ehab Youssef alleges company president Mike Ryan and investor Timothy O’Donnell illegally ousted him. 


Youssef’s complaint tells the story of unraveling leadership. According to court documents, majority shareholders O’Donnell and Ryan axed the board of directors and appointed themselves directors in February 2010. (O’Donnell’s Los Gatos-based investment company, Nordam, ultimately invested $1.2 million, and Ryan $500,000.)


After the ouster, Youssef says he lost access to company bank accounts, and wasn’t party to agreements with the city.


Vallarta says the infighting can only shed light on what happened at Green Vehicles. She’d like to hear Ryan’s side of the story, but says he’s been unavailable for depositions because he’s been living in the U.K. “I’m not sure what’s going on, hide-and-seek or what,” she says. 


Ryan did not respond to an emailed request for comment by the Weekly’s deadline. O’Donnell has also lost touch with Ryan but says Youssef’s complaint is unfounded. “He was not performing. He was losing a lot of money and there was no prospect of him turning it around, so I replaced him,” O’Donnell says. 


Youssef is seeking at least $85,000 in lost wages and argues any damages awarded to the city should be paid for by Ryan, O’Donnell and Nordam.


“We’re just trying to recover as much of the taxpayer investment in this company as possible,” Vallarta says. “Who pays it exactly is not our concern.” 


O’Donnell says the Salinas lawsuit is a surprise. “I don’t know what the city is going for,” he says. “They made an investment in a startup company, and many startup companies don’t succeed.