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Feb 02 2012

DOE: Another loan recipient files for bankruptcy

E&E; News PM - by Emily Yehle

Battery manufacturer Ener1 Inc. -- which received more than $118 million in stimulus funds from the Energy Department -- announced today that it has filed for bankruptcy.

The news comes as House Republicans continue to investigate DOE's loan guarantees to Solyndra and Beacon Power, which have both gone bankrupt after receiving stimulus funds.

Rep. Cliff Stearns (R-Fla.), the chairman of the House Energy and Commerce subcommittee that has led the Solyndra investigation, quickly pounced on the news to criticize what he called a "growing list of failed companies" that have received government backing.

"Sadly, the Department of Energy's jobs record 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," Stearns said in a statement. "One bankruptcy may be a fluke, two could be coincidence, but three is a trend. Our investigation continues, and we are working to ensure taxpayers are never again stuck paying hundreds of millions of dollars because of the administration's risky bets."

Unlike Solyndra, however, Ener1 does not yet plan to shut down. In a press release, Ener1 announced a restructuring plan that it said would reduce its debt and provide up to $81 million to "recapitalize the Company to support its long-term business objectives and strategic plan."

The company says the plan will allow for continued normal operations and employment levels.

In November, DOE said it was "closely monitoring" the car battery manufacturer, after the NASDAQ pulled Ener1 from trading for not filing quarterly reports. The agency had awarded the company stimulus funds to expand its production capabilities in Indianapolis for automotive energy delivery systems.

DOE did not immediately return a request for comment, but in November, spokesman Damien LaVera said the grant received broad bipartisan support.

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