- Combat fatigue: elite special forces troops are ‘fraying,’ Gen. Joseph Votel warns
- German foreign minister to meet Kerry to discuss spying claims
- Florida police spokesman tells citizens: ‘Get yourself some firearms’
- California church handing out ‘travel cash’ to illegals heading east
- PHILLIPS: Liberal lawyers ensuring illegal aliens are never deported
- Chris Christie leading N.H. GOP presidential field; Mitt Romney lingers large
- NYC creates ID card so 500K illegal immigrants can get services
- Florida judge slaps GOP’s redistricting plans: You ‘made a mockery’ of process
- Muslims give Obama high marks over first half of 2014
- Pennsylvania sends draft notices to 14K dead men
Bankrupt car charging firm funded by stimulus still doling out bonuses
Car-charging firm had been awarded $100 million federal grant
Question of the Day
Despite a disastrous year for defunct car-charging company Ecotality, which went bankrupt only a few years after winning a $100 million federal grant, two high-level employees soon stand to receive hefty retention bonus payments even though the company has no future.
Company lawyers say they need to pay the bonuses to make sure the two stick around during the dim final days as the company finalizes the transfer of its assets. A federal bankruptcy court in Arizona approved the bonus plan despite objections from creditors and government lawyers — though the judge capped the total at the $125,000 sought by the company.
Still, the fact that lawyers are quibbling on how to spend $125,000 marks just how fast and far Ecotality has fallen since 2009 when it won a $100 million grant from the Department of Energy.
In the end, various successful bidders offered a total of about $4.4 million for the company's remaining assets, court records show.
Ecotality has seen its workforce drop to just four employees, but company lawyers say they still must complete an audit of a 401K plan, fill out tax returns, liquidate assets and complete other important tasks.
"The debtors believe that further attrition among their remaining employees will leave them unable to meet even the most basic of their obligations without incurring substantial expenses" by hiring replacement workers, Ecotality bankruptcy lawyers argued in court papers.
Lawyers said they believed that the two unidentified employees would quit if they didn't get more money.
But a creditors committee and the Office of the Trustee, an arm of the Justice Department that monitors bankruptcy proceedings, separately filed court papers opposing the bonus plan. Both noted that an even earlier incentive plan had already been rejected during bankruptcy.
Elizabeth Amorosi, assistant U.S. trustee, argued in one motion that it's not clear where the money from the bonuses would come from because Ecotality isn't operating anymore.
"The sales netted little real cash to the estates and significant administrative expenses have been and continue to be incurred and paid," she wrote in a court filing.
Lawyers for a creditors committee argued in a separate motion that the retention plan was an "unnecessary and expensive expenditure" by a bankrupt company with little left to distribute to unsecured creditors.
According to creditors, the bonus plan would equal the two employees' regular salaries from Dec. 1 to the end of February 2014 plus one week of salary for each week worked.
"This proposal is unconscionable," creditors' lawyers argued in a pleading.
Nonetheless, Bankruptcy Judge Randolph Haines signed off on the plan on Dec. 23, ruling the it was best interests of Ecotality's estates and creditors.
Ecotality's collapse has drawn comparisons to Solyndra, the bankrupt California solar panel maker that shut down while owing taxpayers more than $500 million in federal loans.
Even after Solyndra's bankruptcy, nearly two dozen of its employees received incentive bonuses in 2012, drawing sharp criticism at the time from Republicans in Congress.
Solyndra lawyers had also warned that the defunct company's workers would flee and would need to be replaced by pricey outside consultants.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at email@example.com.
- Patent official threatened to sue IG over damning report
- EXCLUSIVE: Head of trademark office accused of nepotism
- Coburn calls hiring of embattled background check firm 'troubling'
- Purchases of Obama books wane, except at State Department
- Iraq logistics contract goes on years after withdrawal
Latest Blog Entries
TWT Video Picks
Senate majority leader practices politics of personal destruction
- Va. Democrat reportedly seeks nude shots of Kendall Jones
- Armed militia sets up Texas command center to 'fight for national sovereignty'
- Obama seeks brisk passage of border children funding bill
- Bloomberg: Pro-gun towns must lack roads
- PRUDEN: 'Dirty Harry' Reids increasing eccentricity
- Hamas orders civilians to die in Israeli airstrikes
- IRS employee suspended for pro-Obama activities
- BRUCE: The feds plot to steal your paycheck
- Bush fixed bowling lanes that Obama wants to renovate
- Amid border crisis, Obama to take 15-day vacation in Martha's Vineyard
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq
World Cup's sexiest WAGs