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
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Author: Patrick T. Conlon
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
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.