Ener1 Enters Chap. 11 Bankruptcy

CEO Alex Sorokin cited intense competition as the reason for the company’s recent troubles, especially from rivals based in Asia. Ener1 was one of a handful of alternative energy industry companies to receive federal grants. It received around $119 million in 2009 from the U.S. Department of Energy as part of the federal government’s efforts to support the nascent U.S. electric car industry.

Ener1’s bankruptcy comes a few months after financial troubles at Solyndra LLC, a solar energy maker, which also received federal funding. Ener1, based in New York, makes lithium-ion batteries for electric cars and has submitted a restructuring plan to the U.S. Bankruptcy Court in New York.

“We moved aggressively to reduce costs and shift focus when the marketplace did not evolve as quickly as anticipated. Our business plan was impacted when demand for lithium-ion batteries slowed due to lower-than-expected adoption for electric passenger vehicles,” continued Sorokin. “That pressure was exacerbated by volatility in the debt and equity markets that further limited our borrowing ability and the loss of a major customer, Think Global, which filed for bankruptcy in June 2011, and for which we were exclusively providing commercial lithium-ion battery packs. We believe that the restructuring plan will enable us to address our business and financial challenges comprehensively, quickly and efficiently, and position us to compete much more effectively in the energy storage market.”

On December 12, 2011, the Company’s common stock was delisted from NASDAQ. Pursuant to the Plan, that common stock will be extinguished at the conclusion of the reorganization case and current equity holders will not receive any distributions.

The Company’s legal advisor is Reed Smith LLP and its financial advisor is Houlihan Lokey Capital, Inc. Additional information about the reorganization is available online at http://www.ener1.com/?q=content/tr-sec-filings.

Ener1, Inc. (OTC: HEVV) is an energy storage technology company that develops compact, lithium-ion-powered energy storage solutions for applications in the electric vehicles, utility, transportation and industrial electronics markets. With manufacturing facilities in the U.S. and Korea, the company’s multiple chemistries, prismatic design, and modular stacking architecture deliver the optimal solution to each application.