Ecotality, an electric car charger maker, files for bankruptcy

Ecotality Inc , a maker of charging stations for electric cars that won a $99.8 million grant from the U.S. Department of Energy four years ago, has filed for bankruptcy protection and said it plans to auction its assets next month.

The San Francisco-based company is among a growing number of U.S. alternative-energy companies that have struggled or succumbed amid consumer resistance to the high cost and restricted driving range associated with electric vehicles.

Ecotality and five affiliates filed for Chapter 11 protection on Monday night with the U.S. bankruptcy court in Phoenix.

The company said eight parties have expressed interest in bidding on its assets and that it wants to hold an auction on October 9, with a closing to occur within two days.

Citing "significant liquidity constraints and the difficulty of obtaining long-term financing," Ecotality said an auction is necessary to maximize value for creditors and avoid a "fire-sale liquidation."

Ecotality makes systems for electric vehicles under the Blink and Minit Charger brands. It had warned on August 12 that a bankruptcy filing was possible, amid disappointing sales and a suspension of payments from the federal government.

Among other U.S. alternative energy companies, green car startup Coda Holdings Inc filed for bankruptcy protection in May after selling just 100 all-electric sedans.

Meanwhile, the Energy Department on Tuesday said it will in October sell a non-performing loan made to another green car startup, Fisker Automotive.

Ecotality's $99.8 million grant was awarded in August 2009 to help develop the EV Project, a network of charging stations for vehicles such as the Chevrolet Volt and Nissan Leaf in major U.S. metropolitan areas.

The company said Nissan North America Inc agreed to provide up to $1.25 million of financing to keep it operating during the bankruptcy. Court approval is required for that loan.

According to a court filing, the Energy Department is owed $6.5 million as the largest unsecured creditor of Ecotality affiliate Electric Transportation Engineering Corp.

A hearing on Ecotality's "first-day motions," including that it be allowed to pay employees and vendors, is scheduled for Thursday morning.

Shares of Ecotality closed on Tuesday down 7.2 cents, or 31.1 percent, at 15.9 cents on the Nasdaq. They closed at $1.46 on August 9, the last trading day before Ecotality warned of a possible Chapter 11 filing.

The case is In re: Ecotality Inc, U.S. Bankruptcy Court, District of Arizona, No. 13-16127.

(Reporting by Jonathan Stempel in New York; Editing by Carol Bishopric)