This time however they don't have a leg to stand on. Yes, Ener1 received government loans and grants. Yes, they entered bankruptcy. Yes, they're a green tech company supplying components for the electric vehicle industry. But the conditions of this deal are different than the conditions of Solyndra, which went straight into liquidation very suddenly.
Ener1's story is that they at one time were slated to supply batteries to both Fisker Automotive and Think Global for their respective electric cars. However Fisker backed away from an arrangement with Ener1, choosing instead to buy batteries from A123 Systems. In the meantime Ener1 bought a large stake in Think, and at the same time Think became a large customer of Ener1. As time proceeded Think received much funding from a diverse investor group. They moved to set up manufacturing operations in Indiana, near the plants owned by Ener1. But as time moved on Think went into bankruptcy, again (the company has a habit of doing this). Ener1's stake in that company was wiped out and later Think was bought by a Russian investor. A few months later Ener1 was late in filing their SEC reports, and then later told the SEC they'd have to restate their earnings reports for the previous couple years, and this resulted in Ener1's stock being delisted.
Hence Ener1's failure is because they counted on Think's survival and that Think would go to producing electric cars while buying batteries from Ener1. Think failed at that plan, and Ener1 ran into serious business trouble.
Is this a consequence of the Government giving them loans and grants? Nope. But to hear the Republicans talk about it this habit of handing out loans and grants is the worst thing any government could be doing.
In any case, Ener1's investor group is on-board with a rescue and restructuring plan that involves injecting nearly $100 million to recapitalize the company and get it going again.
Hardly sounds like a company about to sink beneath the waves, and hardly sounds like a company whose investors see as too risky.
So why are Republican's slamming this event that is capitalism in operation? Investors taking risks on buying into a company to see it grow into success?
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