ECOtality Scandal: The Bankruptcy!!
Troubled electric car recharger manufacturer ECOtality, Inc. filed for bankruptcy on Monday.
It was supposed to help fulfill President Obama’s visionary promise to put 1 million hybrid electric vehicles “made right here in America” on U.S. roads by 2015.
ECOtalitiy’s role (fueled with $100+ million in “stimulus” cash) was to create a 15,000 strong recharger network proving that a nationwide infrastructure of electric car “filling stations”, similar to today’s gasoline stations, could be built.
Nice thought; didn’t work. ECOtality went down in a scandalous ball of flames.
Now it is Case No 13-16126 in the United States Bankruptcy Court for the District of Arizona.
ECOtality filed SEC Form 8-K #000-50983 yesterday outlining a proposed bankruptcy agreement.
Lawyers and creditors gathered like vultures to peck away at the carcass.
Yesterday’s SEC filing identified three main expectations and one resignation:
- Sell off all its assets at auction
- Expect ECOtality stock to be worthless
- Get a $1.25 million loan from Nissan North America
- Brandon Hurlbut resigned from the board effective September 15th, 2013
Companies have returned from the dead before.
But when it proposed scheduling an auction to sell off all its assets and says they don’t expect their stock to be worth a plug nickle, its over! ECOtality stock today is trading at 0.1411¢.
What’s strange about this bankruptcy is it contains a $1.25 million dollar loan to ECOtality from Nissan North America.
Why, you ask? The loan is to keep the EV Project alive (specifically the Blink Network) until Nissan can figure out what it’s going to do for its thousands of Leaf owning customers that have defective ECOtality chargers mounted on their garage walls right now. If Blink, blinks off then there are gonna be a whole lotta angry plug-in hybrid car owners holding lawyer phone numbers in hand.
Generally speaking, that’s not good for business. Hence, $1.25 million to keep the Blink Network up and running until October 28th, 2013.
The first loan payout to ECOtality comes as a $500,000 lump sum as soon as the Court approves it. Then there are three more loans of $250K each after that; one on September 25th, one on September 30th and one on October 7th. That is supposed to keep the Blink Network alive until October 28th.
Nissan North America gets paid back out of whatever pocket change remains after the ECOtality asset sale.
Brandon Hurlbut resigned as a director of the Company effective September 15, 2013. Mr. Hurlbut’s resignation was not the result of any disagreements with the Company on any matter related to the Company’s operations, policies, or practices.
– SEC Form 8-K #000-50983, 9/17/2013
You may be asking yourself:
“Self, who is Brandon Hurlbut? Why is he mentioned so prominently in an SEC bankruptcy filing? Why is he claiming benign reasons for leaving ECOtality on the day before the company filed for bankruptcy?”
Perhaps these are some of the answers:
- He worked on Obama’s 2008 presidential campaign
- He was on Obama’s 2008 transition team
- He was once Obama’s White House Deputy Director for Cabinet Affairs
- He was once the Obama Energy Secretary Steven Chu’s Chief of Staff
In that last roll, Hurlbut managed the DOE’s green initiatives and ran day-to-day operations. The DOE approved a whopping $135 million in freebie grant money to a tiny, obscure company called ECOtality, Inc.
Hurlbut was hired onto ECOtality’s Board of Directors on July 5th, 2013. That was while the Inspector General’s office was preparing an audit report on ECOtality and ECOtality was also under active investigation by the SEC for insider trading.
- Jul 5th: ECOtality hires Brandon Hurlbut
- Jul 25th: Scathing IG audit report released
- Aug 8th: DOE suspends payments to ECOtality
- Aug 11th: ECOtality suspends most operations
- Sep 16th: ECOtality files for bankruptcy protection
- The insider trading investigation is still ongoing
No wonder Brandon wanted to slink on out of Dodge City!
ECOtality isn’t an isolated case of boondoggle green energy spending, either.
Added to the list there are now at least 37 government-backed green energy bankruptcies involving just about every company that President Obama has publicly praised in major speeches.
It is time for government to stop picking winners and losers. It’s no good at it.