Green-energy company headed by Pitt grad subject of class-action lawsuits by investors
Lawyers are lining up to pick over assets that might be left from the threatened bankruptcy of ECOtality Inc., the latest federally backed, “green” energy company to apparently falter.
Two federal class-action suits have been filed against the San Francisco-based company, which made plug-in stations for electric vehicles until it reportedly laid off its employees last week. Another law firm says it has filed a suit, and others are threatening.
ECOtality's CEO, H. Ravi Brar, is a graduate of the University of Pittsburgh's Katz School of Business.
Brar could not be reached. Representatives from the company and the lawsuit plaintiffs did not return messages from the Tribune-Review.
ECOtality received about $100 million in federal stimulus grants from the Department of Energy. If the company goes bankrupt, it would join Solyndra and Abound Solar as failures of the DOE green energy program.
The government maintains that the losses are a small part of its total green energy effort, and it says that at 1 percent to 2 percent, they are lower than the failure rate for many start-ups.
Critics say the failures demonstrate the folly of government trying to steer national energy policy.
The class-action suits claim the company misstated its financial position this year when it touted that “our strong financial performance for the year reflects the health of the company and our continued execution upon our business model.”
That and other statements caused the stock to jump as high as $2.40, according to a plaintiff's attorney.
But on Aug. 8, the company reported to the Securities and Exchange Commission that its accounts were empty and the Energy Department said “it was suspending payments to the company.”
The company told the SEC it is searching for “restructuring or sale of the entire business and/or assets.” Failing that, “the company may need to file a petition commencing a case under the United States Bankruptcy Code.”
With that, the stock price plunged. It traded on NASDAQ on Tuesday afternoon at 17 cents a share.
DOE spokesman Bill Gibbons earlier told the Trib that by the time of the SEC filing, ECOtality had “installed more than 12,500 charging stations in 18 United States cities — or approximately 97 percent of their goal.”
Lou Kilzer is a staff writer for Trib Total Media. He can be reached at 412-380-5628 or firstname.lastname@example.org.