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. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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