Konarka Technologies Files for Chapter 7 Bankruptcy Protection
Konarka Technologies, Inc., a leading developer of thin-film solar panels, has filed for bankruptcy protection under chapter 7 of the Federal bankruptcy laws. Under chapter 7 proceedings, the companyâ€™s operations cease and a trustee is tasked with liquidating the companyâ€™s assets for the benefit of creditors. Creditors will be asked to submit their claims to the Bankruptcy Court and are unable to obtain payment from the company.
Howard Berke, chairman, president and CEO of Konarka, said, â€œKonarka has been unable to obtain additional financing, and given its current financial condition, it is unable to continue operations. This is a tragedy for Konarkaâ€™s shareholders and employees and for the development of alternative energy in the United States.â€ Â Konarkahad previously attracted $170 million in private capital and $20 million in government research grants.
The company’s bankruptcy filing has attracted more than its share of attention due to the fact that Republican presidential nominee, Mitt Romney,Â gave Konarka a $1.5 million loan, part of $9 million in state financing to clean-energy companies when he was Massachusetts governor but just last week Mr. Romney staged a campaign event outside bankrupt solar company, Solyndra, disparaging President Obama’s support for the renewable energy sector.
Konarka was founded by Mr. Berke and by Dr. Alan Heeger, the winner of the Nobel Prize for his work in conductive polymers. Among the Companyâ€™s assets are over hundreds of owned and licensed patents and patent applications in the field of solar energy and a state-of-the-art manufacturing plant in New Bedford, Massachusetts. Â The company, which said it would lay off its 85 workers,valued its assets at $100,000 to $500,000s and listed $10 million to $50 million in debt.
Mr. Berke noted that several large international companies had expressed interest in financing or acquiring the company. He further noted that, given the worldwide interest in the company, including from the Chinese government, the company had not entirely given up hope that a rescue financing or acquisition would emerge in the bankruptcy. Under Chapter 7 proceedings, however, any such transactions are evaluated by a trustee and not by the company itself.
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