ILNews

EnerDel parent facing shareholder legal battle

IBJ Staff
October 19, 2011
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A federal judge in New York as early as this week could chose a lead plaintiff from among at least three lawsuits accusing the parent of Indianapolis-based advanced-battery maker EnerDel of misleading investors about its financial condition.

Investors began filing the suits in August, days after New York-based Ener1 said it would restate earnings for 2010 and for the first quarter of this year.

Ener1’s 2010 financial loss of $69 million eventually was restated to a loss of $165 million.

The restatement stemmed from write-downs in the company’s investment in Norwegian electric car maker Think, which was behind in payments to Ener1 for batteries.

Think, which assembles cars in Elkhart, filed for bankruptcy this summer. It has since been been acquired by investment group led by Russian entrepreneur Boris Zingarevich, who also is a major investor in Ener1.

Smaller investors who filed suit since August allege that Ener1 made false and misleading statements about Think’s true condition and failed to make timely impairment to the value of its Think investment.

Ener1’s shares have tumbled from more than $4 a share in January, when Vice President Joe Biden visited EnerDel’s Greenfield battery plant, to about 27 cents per share in recent days. The company expressed concerns about its ability to stay afloat in regulatory documents filed in August.

According to federal court records, the largest group of investors filing suit appears to have lost an aggregate $379,891.

Proving “loss causation” in such lawsuits can be a challenge. Courts have raised the burden of proof for plaintiffs to show a misstatement caused them financial loss.

“You have to prove the information was material and that the information that was missing caused the loss,” said Irwin Levin, a partner of Indianapolis law firm Cohen & Malad, which has successfully prevailed in such suits over the years.

Ener1’s Indianapolis-area operations at the beginning of the year employed about 350 people. Company officials declined to comment on the recent lawsuits, saying they are in a quiet period amid the earnings-restatement process.

The Indiana operations produce lithium-ion batteries used for hybrid cars — mostly the Think — and for power-grid storage. Ener1 also has struck preliminary agreements to supply batteries for electric cars in China, and is slated to provide batteries for a Volvo hybrid station wagon.

The company applied for $290 million in federal loan guarantees and is awaiting word on approval. It previously received a $118.5 million U.S. Department of Energy grant.

This story originally ran in the Oct. 18, 2011, IBJ Daily, a sister publication of Indiana Lawyer.
 
 

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  1. From his recent appearance on WRTV to this story here, Frank is everywhere. Couldn't happen to a nicer guy, although he should stop using Eric Schnauffer for his 7th Circuit briefs. They're not THAT hard.

  2. They learn our language prior to coming here. My grandparents who came over on the boat, had to learn English and become familiarize with Americas customs and culture. They are in our land now, speak ENGLISH!!

  3. @ Rebecca D Fell, I am very sorry for your loss. I think it gives the family solace and a bit of closure to go to a road side memorial. Those that oppose them probably did not experience the loss of a child or a loved one.

  4. If it were your child that died maybe you'd be more understanding. Most of us don't have graves to visit. My son was killed on a state road and I will be putting up a memorial where he died. It gives us a sense of peace to be at the location he took his last breath. Some people should be more understanding of that.

  5. Can we please take notice of the connection between the declining state of families across the United States and the RISE OF CPS INVOLVEMENT??? They call themselves "advocates" for "children's rights", however, statistics show those children whom are taken from, even NEGLIGENT homes are LESS likely to become successful, independent adults!!! Not to mention the undeniable lack of respect and lack of responsibility of the children being raised today vs the way we were raised 20 years ago, when families still existed. I was born in 1981 and I didn't even ever hear the term "CPS", in fact, I didn't even know they existed until about ten years ago... Now our children have disagreements between friends and they actually THREATEN EACH OTHER WITH, "I'll call CPS" or "I'll have [my parent] (usually singular) call CPS"!!!! And the truth is, no parent is perfect and we all have flaws and make mistakes, but it is RIGHTFULLY OURS - BY THE CONSTITUTION OF THIS GREAT NATION - to be imperfect. Let's take a good look at what kind of parenting those that are stealing our children are doing, what kind of adults are they producing? WHAT ACTUALLY HAPPENS TO THE CHILDREN THAT HAVE BEEN RIPPED FROM THEIR FAMILY AND THAT CHILD'S SUCCESS - or otherwise - AS AN ADULT.....

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