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Court OKs EnerDel parent's bankruptcy plan

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A court has approved Ener1's plan to emerge from bankruptcy, the parent company of locally based EnerDel announced Wednesday.

The New York-based electric-car power company, which filed for Chapter 11 protection late last month, expects to come out of the court reorganization by mid-March.

Under Ener1's plan, it will secure up to $86 million in new equity funding and restructure its long-term debt. In addition to the added funding, Ener1 said some creditors have also agreed to restructure their debt in a partial debt-for-equity exchange.

All of the current common stock will be cancelled when the plan becomes effective — expected in the next two weeks. New common and preferred stock will be issued.

The company has been hurt by heavy competition from other countries, especially China.

Ener1 Inc. was the third company to seek bankruptcy protection after receiving assistance from the Energy Department under the economic stimulus law.

Ener1 subsidiary EnerDel received a $118 million stimulus grant from the Energy Department in 2009. California solar panel maker Solyndra Inc. and Beacon Power, a Massachusetts energy-storage firm, declared bankruptcy last year. Solyndra received a $528 million federal loan, while Beacon Power got a $43 million loan guarantee.

At one time, Ener1 leaders said they planned to have 1,400 employees working in Indianapolis-area operations before 2015, but local employment slipped from about 380 in March 2011 to roughly 250 by November. The company dismantled its management team late last year after several setbacks.

EnerDel operates from a Hague Road headquarters, a facility in Noblesville and leased factory space in the Mount Comfort area of Hancock County.

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  • Governments do lose
    For every 250,000 companies created each year, less than 1% are still in business after five years. Normally, venture capital funds new startups, based on technological or market growth potential, and venture capital managers monitor their investments. When governments; local, state, and federal decide to play in the venture capital world of risk investment, the failures stand out like a sore thumb. In the 60's, firms that supplied NASA for the Space Program, were able to obtain government infusion for the startup process. Many of those small firms failed, not because the technology was weak, but due to weak management which was not prepared to manage a fast growing business. While I understand the need to create green energy products and services, it is hard to understand why government needs to get involved in the loan and support process. Rarely do you find the founders of a great startup being retained long term, because the folks who start companies might be able to get a great idea off the ground, however those same founders have little understanding when it comes to managing a $500 Million infusion from government. If the federal government wants to create jobs, give the money to first tier venture capital firms, or invest in larger companies such as the auto industry. While many people disagree with that move, the management structure was in place to get those firms back on track, which saved over a million jobs, and created several thousand new jobs.
  • Question
    How much money is the federal, state, & local governments lose in this bankruptcy?

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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