ILNews

EnerDel parent facing shareholder legal battle

IBJ Staff
October 19, 2011
Back to TopCommentsE-mailPrintBookmark and Share

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.
 
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Future generations will be amazed that we prosecuted people for possessing a harmless plant. The New York Times came out in favor of legalization in Saturday's edition of the newspaper.

  2. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  3. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  4. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  5. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

ADVERTISEMENT