Ener1 Inc., which owns an electric car battery-maker that reaped a $118-million grant from the Obama administration, filed for bankruptcy protection Thursday. The New York-based company claimed defaults on its bond debt were spurred by rising competition from China and other countries. Ener1 listed $73.9 million in assets and $90.5 million in debt as of December 31 in Chapter 11 papers filed in U.S. Bankruptcy Court.

The company announced Thursday it had reached an agreement with primary investors and lenders on a restructuring plan that will include $81 million to recapitalize its business plan and renew its strategic objectives. In commencing a "pre-packaged" Chapter 11 case, Ener1 said none of its subsidiaries has initiated reorganization cases, and that the plan affords the continued operations of Ener1’s other business entities, including EnerDel, EnerFuel, NanoEner, Emerging Power, and Ener1 Korea.

"This was a difficult, but necessary, decision for our company. We are extremely pleased to have the strong support of our primary investors and lenders to substantially reduce the Company's debt," CEO Alex Sorokin said in a press release. "Their support demonstrates that our business partners have an appreciation for our future business opportunities in providing energy storage solutions for electric grid, transportation and industrial applications. We expect the new funding to provide ample liquidity for our subsidiaries to meet their ongoing obligations to employees, customers and suppliers."

Click here to read the entire article.