A reply by stimulus recipient ($115 million of a $249 million grant paid out) A123 Systems to an inquiry by Republican Sens. Charles Grassley (Iowa) and John Thune (S.D.) showed the electric vehicle battery manufacturer received nearly $1 million in Recovery Act funds on the day it declared bankruptcy.
The money flow is not likely to stop.
A123 as a whole, or in pieces, is going to be sold to the court-approved buyer(s). That is likely to be either Johnson Controls, which is the lead bidder for the company’s automotive business, or Wanxiang Group, which wants to buy the whole company. A123 had an agreement to transfer up to 80 percent of the company’s ownership to the China-based automotive parts manufacturer over the summer, but its bankruptcy filing on Oct. 16 – with Johnson Controls as the new automotive assets purchaser – nullified its agreement with Wanxiang.
But … Read More ➡ “Payouts to Bankrupt A123 Systems Likely to Continue”
The venture finance operation that raised money for crony capitalist investors Kleiner, Perkins, Caufield and Byers, and their green tech firms like electric car company Fisker Automotive ($193 million paid in stimulus loan guarantees) and fuel cell manufacturer Bloom Energy, is shutting down, according to a Fortune report.
Advanced Equities, Inc. had recently been reprimanded by the Securities and Exchange Commission and by the Financial Industry Regulatory Authority (FINRA) for misleading investors and for breach of contract with its brokers. Fortune cited sources that said AEI brokers were told last week that Monday would be their last day. Crain’s Chicago Business confirmed that AEI was shutting down its broker-dealer business following its regulatory troubles, which “made it difficult to run the business.”
The co-founders of the Chicago-based firm, Dwight Badger and Keith Daubenspeck, received a sharp reprimand and severe fines from the SEC in September for delivering … Read More ➡ “Fisker’s Big Fundraiser is Going Out of Business”
President Obama’s penchant for flushing taxpayer money down the green energy toilet lives at least another four years, and his crony supporters continue to benefit.
The latest example is the pending sell-off of assets by bankrupt A123 Systems, which was awarded upward of $279 million in stimulus funds, plus other assorted government grants and contracts. The top executives who presided over its failure – and supported the president’s cap-and-tax initiatives early in his term – are likely to receive millions of dollars in bonuses, thanks to their scheming earlier this year and a bankruptcy court judge.
Associated Press reported that that judge, Kevin Carey, ruled on Thursday that the electric vehicle battery maker can proceed with the bankruptcy process after a break-up fee – as part of a deal for Johnson Controls to buy its automotive assets – was lowered. Had a deal not been consummated, Johnson could … Read More ➡ “A123’s Executives Get Their Richly Undeserved Bonuses”
We’ve already seen Fisker Karmas spontaneously ignite in a Texas garage and a supermarket parking lot in California, which were blamed on isolated incidents.
But now the taxpayer-subsidized ($193 million) electric automaker has seen several of its $102,000+ luxury hybrids go up in smoke all at once, thanks to Hurricane Sandy.
Jalopnik.com reported Tuesday night that approximately 16 of the Karmas that were parked in Port Newark, N.J. Monday night as Hurricane Sandy approached were submerged by the storm surge. According to the Web site’s unidentified source, the vehicles then “caught fire” and “exploded.” Jalopnik has exclusive photos of the Karmas in which they all were thoroughly destroyed by what must have been an intense inferno.
Fisker – which was supposed to received $529 million from the Department of Energy’s stimulus allocation but was shut off because its business performance shortcomings – has acknowledged the incident.
“We can report that … Read More ➡ “Hurricane Sandy Reduces 16 Fisker Karmas to Ashes”
Is it back to China for Obama-boosted battery maker A123 Systems?
In August the Massachusetts stimulus recipient (more than $279 million, plus a bundle of other government contracts) announced that Wanxiang Group would infuse the failing company with quick cash as part of a plan to assume as much as 80-percent ownership. A barrage of questions and concerns followed – most prominently from Republican Sens. Charles Grassley (Iowa) and John Thune (South Dakota) – about the logistics of the deal, the potential relocation of taxpayer-funded jobs overseas, and the protection of U.S.-financed technology. Required approval by both the Chinese and U.S. governments seemed to be a high hurdle.
That, in addition to stipulations such as A123 keeping all its government goodies and maintaining its listing on the NASDAQ, appeared to be too much to see the deal through. So when the company declared bankruptcy on October 16, … Read More ➡ “Chinese Back in the Picture to Buy Bankrupt A123 Systems”
A story that went viral over a week ago showed how (non)-workers at a Michigan electric vehicle battery plant, funded through the stimulus by taxpayers, spent their time playing games, reading magazines, watching movies or helping charities like Habitat for Humanity – that is, when they weren’t ‘off-duty’ on their cyclical furloughs.
According to a report by WOOD-TV in Grand Rapids, the LG Chem factory in Holland, Mich. – blessed with $151 million from a Department of Energy Recovery Act grant and $100 million from Wolverine State taxpayers – had “yet to ship out a single battery.”
But another local television station discovered some workers doing something else with their paid-but-free time: teaching students about their failed industry. WZZM, the local ABC affiliate, reported that engineers from LG Chem visited a local job training facility called Careerline Tech Center after they were invited by its director, Dave Searles.
“We’re working … Read More ➡ “Failed Renewable Technologies Are An Expensive Teaching Moment”
The claim that the many beneficiaries (like Solyndra and Fisker Automotive) of President Obama’s green energy stimulus program received their millions of taxpayer dollars based on measurable metrics rather than political favoritism has always been undermined by the circumstantial evidence, but documents obtained by Complete Colorado indicate the White House applied direct pressure to its own Department of Energy to reward (another) one of its allies.
The company that reaped the benefit was Abound Solar, which filed for bankruptcy in June. In a copy of a June 2010 email, as analysts who evaluated applications were discussing doubts about the Loveland, Colo.-based solar panel manufacturer, DOE Loan Program Executive Director Jonathan Silver informed an agency credit advisor “that the WH (White House) wants to move Abound forward.” Another message from that loan program credit adviser, James McCrea, describes an atmosphere of “transaction pressure under which we are … Read More ➡ “Emails Show White House Exerted Pressure for DOE Loan to Abound Solar”
Taxpayer stimulus waster A123 Systems has not only declared financial bankruptcy – its executives also seem to be driving toward moral bankruptcy as well.
CEO David Vieau and his lieutenants, after receiving well over $279 million in Recovery Act funds and at least $135 million from Michigan taxpayers, have run the company into the ground. Yet they have asked a bankruptcy court judge for his blessing to receive up to $4.2 million in executive and retention bonuses to see through the company’s takeover, likely by Johnson Controls.
NLPC detailed the self-serving nature of A123’s leadership in February. At the time A123 had laid off 125 employees in November at its two plants in Livonia and Romulus, Mich. Company officials said diminished production by A123’s top customer, Fisker Automotive, led to the cutbacks. A123 had expected to deliver batteries for 7,000 plug-in hybrid Fisker Karma models, but faulty wire harnesses … Read More ➡ “Executives at Bankrupt A123 Now Want Bonuses”
As Bloomberg reported today, stimulus-funded electric vehicle battery maker A123 Systems filed bankruptcy in federal court after failing to make a debt payment that was due. Milwaukee Business Times has reported that Johnson Controls will purchase the “automotive business assets” of A123 for $125 million, and that A123 will receive from Johnson $72.5 million in “debtor in possession” financing to continue operating during the sale process.
Regular readers won’t be surprised, as the company’s gradual sink to its current depths – despite receiving hundreds of millions of dollars from taxpayers – has been covered by NLPC since late last year. A review:
December 2011: A123 announced it would lay off 125 employees at its two refurbished plants in Michigan, attributing the cutbacks to diminished production by its top customer, Fisker Automotive. NLPC documented how A123 was also an investor in Fisker, which has had its own difficulties … Read More ➡ “Timeline: A123 Systems’ Downward Spiral to Bankruptcy”
As stimulus-funded ($249 million-plus) A123 Systems sees its stock price drop back near its all-time low and waits for a Chinese rescue, two Republican senators want answers about whether taxpayer dollars are again funding jobs and technology that will be transferred overseas.
Iowa Sen. Charles Grassley, the ranking minority member on the Judiciary Committee, and South Dakota Sen. John Thune queried A123 CEO David Vieau about the logistics of a proposed sale to China-based Wanxiang Group Corp. In August, just as the company reported another $82.9 million in second-quarter losses, a deal was announced in which Wanxiang would deliver $75 million in initial loans and then would buy $200 million of senior secured convertible notes, followed by a possible $175 million “through the exercise of warrants it would receive in connection with the bridge loan and convertible notes.” If fully consummated, the end result could mean A123 ends … Read More ➡ “Government Love for Failing A123 Systems Was Unconditional”