Struggling electric vehicle manufacturer CODA Holdings, Inc. has filed a voluntary petition under Chapter 11 in the US Bankruptcy Court, District of Delaware (Petition Nº 13-11153) to enable the reorganization of its business solely around energy storage based on its Li-ion battery systems. This process is intended to enable CODA to complete a sale, to confirm a plan and to emerge from bankruptcy. CODA expects the sale process to take 45 days to complete.
FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide debtor-in-possession (DIP) financing to enable CODA’s extant energy storage business (CODA Energy) to remain fully operational during the restructuring process.
CODA Holdings has filed a motion with the bankruptcy court for approval of the consortium, or its designee, as the stalking horse bidder in the sale process to acquire the company post-bankruptcy. In addition, CODA will seek to monetize value of its existing automotive business assets.
After concluding a comprehensive review of our strategic options, the Board of Directors, management team and senior lending group have concluded that focusing on the company’s energy storage business presents the best opportunity moving forward. We believe the restructuring process that we have entered into today will enable the company to complete a sale and confirm a Plan that maximizes the value of its assets, serving the best interests of our stakeholders.—Phil Murtaugh, Chief Executive Officer, CODA Holdings, Inc.
CODA diversified its business and formed CODA Energy two years ago. CODA Energy’s products are based on the same core technology—including its proprietary battery management and thermal management systems—in CODA’s electric vehicles, but adapted for stationary energy storage applications.
CODA Energy designs and builds scalable, custom energy storage solutions optimized for generation, distribution and behind-the-meter applications for commercial, residential and industrial end users.
CODA’s legal advisor in connection with the restructuring is White & Case LLP. Emerald Capital Advisors serves as its Chief Restructuring Officer and restructuring advisor, and Houlihan Lokey serves as its investment banker for the restructuring. Sidley Austin LLP is serving as FCO MA CODA Holdings LLC’s legal advisor.