Just days after President Obama discussed the need for continued federal investment in alternative energy technology, a New York-based company that owned an electric car battery-manufacturing subsidiary filed for Chapter 11 bankruptcy. Ener1 cited increased competition from China and other countries as one of the reasons for the filing.

In what could be another black eye for the White House, Ener1 subsidiary EnerDel received a $118 million grant from the federal government in 2009. The White House has already received criticism for the bankruptcies of Solyndra Inc. and Beacon Power, which both received federal money in the last few years.

Ener1 said in a statement that the bankruptcy filing will not affect EnerDel's daily operations of lithium-ion car battery manufacturing, according to reports.

The company won permission in U.S. Bankruptcy Court to borrow $13.5 million to continue operations. The company had asked for $20 million, but the judge was not convinced the company needed that much.

In its filing, the company listed $73.9 million in assets and $90.5 million in debt. The company also noted in its filing that the demand for electric cars in the United States has not picked up like the company had hoped.

As part of the restructuring plan, the company will cancel its stock and award new shares to long-term debt holders and a Russian company that is Ener1's largest shareholder. The Russian company is giving Ener1 $81 million to finance operations during the reorganization, and could essentially own the company once it emerges from bankruptcy.

Until the economy picks up and the demand for more expensive electric cars improves, the company will need to use the time in bankruptcy to increase efficiencies and find new ways to keep revenue coming in.

Source: Bloomberg, "Ener1 Wins Approval of $13.5 Million Bankruptcy Financing," Don Jeffrey, Jan. 27, 2012