Was there an investor's packet? Were the 'investors' given a written document explaining the risks that they signed and returned? Did the investors understand how much of the company they owned and how they would be compensated?

When the foundry 'lost the tooling' there was a fiduciary duty on behalf of the investors to sue to protect their investment - was this done?

That's quite a yarn. Maybe it's true. Or maybe a guy made a bunch of promises to customers, took their money ahead of time, screwed up, paid some only people back to some degree, and figured the others could just eat it.

Either way, this is a cautionary tale for all involved and all reading.