Ener1 - This past Thursday the bad news coming out of Ener1 seemed to culminate in the filing of a Chapter 11 bankruptcy petition in the United States Bankruptcy Court in the Southern District of New York. The news about Ener1 has been bad for a while: The ...

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POSTED BY EIZ ON THURSDAY, 19 JANUARY, 2012, 7:14 AM
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This past Thursday the bad news coming out of Ener1 seemed to culminate in the filing of a
Chapter 11 bankruptcy petition in the United States Bankruptcy Court in the Southern District of
New York. The news about Ener1 has been bad for a while: The ...
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ENER1
POSTED BY EIZ ON THURSDAY, 19 JANUARY, 2012, 7:14 AM
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0This past Thursday the bad news coming out of Ener1 seemed to culminate in the filing of a
Chapter 11 bankruptcy petition in the United States Bankruptcy Court in the Southern District of
New York. The news about Ener1 has been bad for a while: The insolvency of a major customer,
restated earnings, loss of senior management, delisting from the NASDAQ, and bridge loans
bridging to who knows what have been weighing heavily on the industry for months. Many had
been expecting the worst.
What was announced on Thursday was, however, not the worst (unless you happened to be a
common stockholder of Ener1) and may even be grounds for some optimism. The filing on
Thursday was a “prepack”, indicating that the major creditors of Ener1 have gotten together and
agreed on a plan for Ener1 going forward. Those creditors, including Liberty Harbor Special
Investments of New York, Itochu Corp. of Tokyo and Goldman Sach’s Palmetto State Credit Union
of Florida, will exchange their debt for all of the stock of Ener1. Trade creditors and employees will
be paid in full. Operations at EnerDel in Indianapolis will continue. And most important, and most
intriguingly, $81 million of new money will be invested in Ener1, according to the company’s press
release.
The future, or at least the near future, of Ener1, therefore, looks far different than that of Solyndra
following its bankruptcy. Operations at EnerDel will continue. The technology and know-how that
the $110 million DOE stimulus grants funded appears to remain intact. The market has not
rejected that technology. In fact, once Ener1’s balance sheet is cleaned up, it appears that the
market will be willing to invest another $81 million in it.