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
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
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.