Advanced Vehicle Systems Inc. (AVS), the Chattanooga firm that has made electric buses since 1993, filed a Chapter 11 bankruptcy on Monday.
The busmaker located in Ooltewah said it would continue to operate during the reorganization.
Company officials said recently they had asked creditors to cooperate as the firm sought to deal with financial troubles.
The firm had been under new management as chairman Joe Ferguson recently retired and Rich Hitchcock went back into the practice of law.
The firm has about 100 employees. It formerly operated in Lookout Valley, but moved two years ago to the former site of Choo Choo Customs.
Jerry Graves, the new AVS president, said, "The filing was necessary due to current financial conditions and in order to restructure the company and continue as a viable, ongoing business."
AVS owes SunTrust Bank nearly $19 million, the city of Tempe, Ariz., almost $4 million and the Chattanooga Area Regional Transportation Authority nearly $3.5 million.
CARTA has gotten a number of electric buses from AVS, but is due a number more under a current contract.