By Dan McCue
Staff Writer

Protected Vehicles Inc., the North Charleston-based mine-resistant vehicle manufacturer, has laid off approximately 400 workers and will file for Chapter 11 bankruptcy protection in Delaware, according to one of its attorneys.

Allan Riley Holmes of the Gibbs and Holmes law firm in Charleston this morning said the bankruptcy filing and layoffs were a direct result of the protracted litigation Protected Vehicles is now engaged in with its local competitor, Ladson-based Force Protection Inc.

He said the plan is for a “quick reorganization” of Protected Vehicles under the existing management team and for the laid-off employees to be back to work by Christmas.

“As you can imagine, the lawsuit initiated by Force Protection has made it really difficult for my clients to attract new investors,” said Holmes, who joined Protected Vehicles’ legal team in November.

“While I don’t have all the details, what I can tell you is that an investment group, a hedge fund, has stepped in and they’re the ones who have been working on the reorganization plan. While the plan is for the leadership of the company to remain the same, I think you will see some change in the actual ownership of Protected Vehicles.”

Force Protection sued Protected Vehicles, its founder Garth Barrett and other former Force Protection executives in federal court in Charleston on Aug. 21, charging them with stealing trade secrets.

Protected Vehicles fired back on Oct. 2 with a countersuit that characterized Force Protection’s lawsuit as an “abuse of the judicial process” and an attempt to smear former executives-turned-“whistleblowers.”

Protected Vehicles’ countersuit alleged its better-established competitor has engaged in multiple violations of U.S. Securities and Exchange Commission rules and regulations to commit “extraordinary acts of fraud and deceit.”

The setback for Protected Vehicles comes on the heels of the U.S. Marine Corps’ decision to buy a third fewer mine-resistant vehicles than it had originally planned for deployment in Iraq and Afghanistan.

Michael M. Aldrich, vice president of marketing and government relations at Force Protection declined to comment on Protected Vehicles’ bankruptcy and layoffs.