A company whose subsidiary won a $118 million grant from the Energy Department filed for bankruptcy Thursday, the third government-backed energy company to go broke in recent months.
The New York-based battery maker won praise from Vice President Joseph R. Biden last year. He toured the company’s Indiana plant and said Ener1 Inc. was “building a brighter, cleaner and more prosperous American future.”
In an announcement on Thursday, the company blamed the move on slower-than-expected demand for lithium ion batteries because of “lower than expected adoption for electric passenger vehicles.”
“This was a difficult but necessary decision for our company,” said Alex Sorokin, the company’s chief executive officer.
The company said it had initiated a “prepackaged” Chapter 11 bankruptcy case in the Southern District of New York and expects to complete the restructuring process in 45 days.
Ener1 listed $73.9 million in assets and $90.5 million in total debt in its bankruptcy filing. Ener1 describes itself as a holding company for several foreign and domestic subsidiaries that “are engaged in the research, development and production of rechargeable batteries and battery backs.” The Energy Department awarded the grant to a company subsidiary named EnerDel, which did not file for bankruptcy.
The Washington Times reported on Ener1 in a 2009 article noting that much of the $2.4 billion in federal grant money awarded through the federal stimulus program went to companies with ties to places as far away as Russia, China, South Korea and France.
In the case of Ener1, The Times reported on the company’s financial ties to Russian industrialist Boris Zingarevich. The company’s bid for government backing won bipartisan support, including from Sen. Richard G. Lugar, Indiana Republican, and former Democratic Sen. Evan Bayh, also of Indiana.
Energy Department spokeswoman Jen Stutsman said the grant to Ener1 subsidiary EnerDel was part of the department’s effort to “commercialize promising vehicle technologies that will help America to reduce its dependence on foreign oil and ensure U.S. companies can compete in the global auto industry.”
“While it’s unfortunate that Ener1, the parent company, has entered a restructuring process, the new infusion of $80 million in private capital demonstrates that the technology has merit,” she said.
“As the company has said, the restructuring is not expected to impact EnerDel’s operations and they do not expect to reduce employment at the site.”
News of the of the company’s bankruptcy comes amid ongoing criminal and congressional investigations into the collapse of Solyndra LLC, the California solar-panel maker that collapsed two years after winning more than a half-billion dollars in federal loans. Another company, Beacon Power, also filed for bankruptcy after winning tens of millions of dollars in loans from the Department of Energy.
“Sadly, the Department of Energy’s jobs records seems to grow worse by the day - first Solyndra, then Beacon Power and now Ener1 - and it is American taxpayers who are paying the price,” said Rep. Cliff Stearns, Florida Republican and chairman of a House subcommittee investigating Solyndra.
“One bankruptcy may be a fluke, two could be coincidence, but three is a trend,” he said.