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EnerDel parent Ener1 completes financial restructuring and emerges from Chapter 11

Ener1, Inc., the parent of lithium-ion battery maker EnerDel, has completed its financial restructuring and emerged from Chapter 11 bankruptcy as a privately-held company. On 26 January, the company had filed a pre-packaged bankruptcy case to implement a restructuring plan agreed on by its primary investors and lenders. (Earlier post.)

The US Bankruptcy Court in the Southern District of New York confirmed the Plan of Reorganization on 28 February; the Plan became effective on 30 March 2012.

We have emerged from bankruptcy with significantly less debt, more working capital and a stronger financial position to enable us to compete more effectively in pursuing business opportunities to provide energy storage solutions for electric grid, transportation and industrial applications.  We are grateful for the strong support of our primary investors, customers, employees and suppliers throughout this process.

—Alex Sorokin, Ener1’s interim CEO

Ener1 restructured its long-term debt and secured an infusion of up to $86 million of new equity funding, which will support the continued operation of Ener1’s subsidiaries.  In addition to the new equity funding, the holders of the existing senior notes, the convertible notes and a line of credit have restructured their debt in a partial debt-for-equity exchange. 

In accordance with Ener1’s prior announcements, and as provided for by the Plan, Ener1’s common stock (which had traded over the counter with the symbol HEVV) was cancelled effective as of 30 March 2012, and Ener1 will no longer be an SEC-reporting company. Holders of the cancelled common stock did not receive any distribution of any kind under the Plan.

Ener1 issued new shares of preferred stock in consideration of the new equity funding that will flow into the Company and in repayment of the debtor-in-possession loan received by the Company in connection with the restructuring.  The existing senior notes were exchanged for a combination of cash, new common stock and new notes, while the convertible notes were exchanged for a combination of cash and new common stock.  The amount due under the existing line of credit was cancelled in exchange for new common stock.



This is another example of how to legally rob share holders and creditors under the cover of Chapter 11 financial restructuring. Plain highway robbery without penalty.



What do you want to do? Take the corporative officers off and have them shot? Did you lose money on them? With start-ups there are winners and losers. If you buy stock in a start-up, it is a fairly large risk. You might get a reward but you might lose it all.

I actually had a small amount of their stock (100 shares). I am not sure what I paid for it without more research than it is worth but I sold it a few months ago for about a nickle a share. Am I mad about it? Not really. I knew that it was a risk and I had invested in some of these stocks that I consider "fliers" but at the same time I had more money invested in higher quality stocks. A couple of my "fliers" paid off while others went nowhere.

Without new start-ups, many worthwhile products would never get off the ground. I work for a start-up and have invested some of my own money in it (far more than I had invested in Ener1). I am reasonably sure that we will succeed but little in life is guaranteed.


Having the corporative officers shot is at the bottom of the list.

But little in life is guaranteed.

It is still on the list.


Were EnerDel only GM, they could collect $50 billion dollars. Were the EnerDel CEO only working for GM, a President would have to fire him and his performance.

GM would punish this CEO with a $22 million dollar pension from stockholder's - then arrange more $millions in consulting fees.


The boon GM received is well known.

As is their continuing freedom from income taxes.

Is there any push to rectify this?

To put it into perspective, lets assume that of the 300 million people in the US there are 60 million families.

Of these 60 million, assume 1/16th (1 million) have young kids, have worked hard and lived smart but are in bad shape financially.

The $30 billion tossed casually to GM as a continuing tax break AFTER the bailout would amount to $30,000 each.

Do they necessarily deserve $30,000 from the government?

Certainly way, way more than post-Bailout GM does.

But never mind GM, lets go after the millions of student loans.


Guess (find out) who invented Chapter 11 and you will find who benefits and who the losers are?

All those Chapter 11 tricks, currently accepted by the majority, are much the same as the $30B tossed to GM and many other tax breaks to Oil people. Basically, those are equivalent ways to transfer $$$$B from the 99% to the 1%. The majority (1%) is therefore deeper in debt year after year. Their total average debt level (personal + city + States + Fed + Pensions) are approaching 200% of yearly gross revenues and growing fast.

The illusion is stronger than nicotine.

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