Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Ecotality Files for Chapter 11 Bankruptcy
Author: Joel R. Glucksman
Date: October 3, 2013
Key Contacts
Back
Ecotality, a green-energy company backed by the U.S. government, has followed in the footsteps of many other electric car battery producers and filed for protection under Chapter 11 of the bankruptcy law.
The company filed its bankruptcy case in the United States Bankruptcy Court in Arizona, and plans to sell its assets in a bankruptcy auction – presuming that the Bankruptcy Court approves. The announcement was not wholly unexpected, as the company had speculated in August that it might be forced into bankruptcy proceedings following a disappointing sales report. The U.S. Department of Energy also suspended payments to the electric car battery maker after it hinted that it may be unable to meet its obligations under the agency’s electric vehicle program, The Associated Press reports. The final financial hit came when Ecotality was forced to pay $855,000 in back wages and damages to settle an investigation by the Department of Labor into allegations of labor law violations.
While the company must wait for a bankruptcy court to approve its request to put its assets up for auction, Ecotality noted that Nissan has agreed to loan it as much as $1.3 million. Should a bankruptcy judge allow Ecotality to move forward with an auction, the company said that eight parties have already expressed interest in bidding on its assets. The company would like to hold an auction on October 9, with a closing to occur within two days, Reuters reports.
Citing “significant liquidity constraints and the difficulty of obtaining long-term financing,” the company said an auction is necessary to maximize value for creditors and avoid a “fire-sale liquidation,” Reuters added.
Ecotality is one of a handful of government-backed companies that have succumbed to declining sales and limited demand for green products in recent months. California solar panel maker Solyndra Inc. and Beacon Power, a Massachusetts energy-storage firm, declared bankruptcy last year. A123 Systems Inc., another electric car batter manufacturer also sought bankruptcy protection recently, despite receiving more than $500 million in federal and state assistance.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Author: Graham Staton
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Author: Michael Mietlicki
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One
For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]
Author: Sean M. Pena
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.