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Politics : The Solyndra Scandal -- Ignore unavailable to you. Want to Upgrade?

To: joseffy who wrote (353)	1/26/2012 9:04:27 PM
From: Hope Praytochange	Read Replies (1) \| Respond to of 1400

Battery Maker Ener1 in Chapter 11 Despite US Grant Published: Thursday, 26 Jan 2012 \| 8:04 PM ET By: Reuters Ener1, which received a $118.5 million U.S. Department of Energy grant to make lithium-ion and other batteries for electric cars, filed for bankruptcy protection amid heavy competition and after the demise of a large customer. Getty Images The Chapter 11 filing with the U.S. bankruptcy court in Manhattan came 4-1/2 months after Solyndra LLC, a solar panel company that obtained $535 million of government loan guarantees, filed for protection from its own creditors. It comes amid persistent criticism of U.S. President Barack Obama from Republican lawmakers about whether his administration is properly assessing "clean energy" companies before authorizing government support. The Energy Department had in 2009 awarded the $118.5 million grant to Ener1's EnerDel unit, as part of a government stimulus package to bolster the U.S. electric car industry. U.S. Vice President Joe Biden hailed the grant in a visit to an Ener1 plant in Indiana exactly one year prior to the bankruptcy filing, on Jan. 26, 2011. EnerDel has used about $55 million of the grant through Sept. 23, a court filing shows. Alex Sorokin, Ener1's interim chief executive, in a court filing said his company faced "intense competition" from other battery makers such as Toyota Motor [TM 74.59 0.37 (+0.5%) ] , as well as Chinese and Korean rivals that have lower manufacturing costs. He also said Ener1 was hurt by the June 2011 bankruptcy of Norway's Think Global, which had been a major customer and whose problems led to a planned Ener1 financial restatement, and slower-than-expected acceptance of electric cars by consumers. Electric cars have also faced increased scrutiny in Washington amid worries that General Motors [GM 24.72 -0.20 (-0.8%) ] Chevrolet Volt might catch fire. A probe completed last week by the National Highway Traffic Safety Administration found no defects in the Volt. 45-DAY BANKRUPTCY SOUGHT Ener1 has $73.9 million of assets and $90.5 million of debts, according to its bankruptcy petition. It filed a "prepackaged" reorganization plan that it said has support from enough creditors, and expects to emerge from Chapter 11 within 45 days. It said the plan would slash long-term debt, provide up to $81 million of new equity financing, and allow it to honor its commitments, which it said include the provision of backup storage systems for the 2014 Winter Olympics. Unsecured creditors would be paid in full, but holders of its 186.9 million shares would receive nothing, Ener1 said. No jobs would be lost because of the filing, it added. Jen Stutsman, an Energy Department spokeswoman, called the bankruptcy "unfortunate," but said the proposed equity infusion "demonstrates that the technology has merit." In the Solyndra case, Republican lawmakers are examining whether political favoritism played a role in the $535 million loan guarantee to that company, which has ties to an Obama fundraiser. Solyndra is selling assets after failing to draw bids to buy the company. Beacon Power, an energy storage company that got a $43 million loan guarantee from the Energy Department, filed for bankruptcy in October. The White House in October appointed former investment banker Herb Allison to review Energy Department loans. Republicans in the House of Representatives pledged on Thursday to continue their own investigation. "One bankruptcy may be a fluke, two could be coincidence, but three is a trend," said Cliff Stearns, a Florida Republican leading that probe. The case is In re: Ener1 Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-10299. Copyright 2012 Thomson Reuters. Click for restrictions.