CODA Automotive Inc., a privately held American company that designs, semimanufactures and sells electric vehicles, filed for Chapter 11 bankruptcy protection on Wednesday after selling just 100 of its all-electric sedans.
The filing with U.S. Bankruptcy Court in Delaware will allow the Los Angeles-based company to focus on its lithium-iron-phosphate (LiFePO4) battery systems operation as well as its power storage utility applications.
A group of lenders led by Fortress Investment Group LLC plans to extend debtor-in-possession financing and will seek to acquire the company for $25 million through the bankruptcy process, Coda said in a statement.
CODA’s first car, an all-electric, four-door, five-passenger battery electric vehicle (BEV) dubbed the CODA sedan, sold for $37,250 and delivered an average of 125 miles on a single charge. The first deliveries of the vehicle to retail customers in the United States took place in March 2012. Since then, the CODA sedan has been recalled once, for a faulty airbag issue.
Founded in 2009, CODA raised $300 million in equity from backers including Aeris Capital, Limited Brands Chief Executive Les Wexner, and former U.S. Treasury Secretary Henry Paulson. The company, however, in 2012 withdrew its request for $334 million in federal loans like the ones received by competitors Fisker and Tesla.
Last year, Coda sought to raise $150 million but secured just $22 million, according to a filing with the U.S. Securities and Exchange Commission.
While Tesla has put thousands of cars on the road, Fisker is reportedly considering a bankruptcy filing. Fisker's lithium-ion battery maker, A123 Systems Inc., filed for bankruptcy late last year.
Coda has about 40 active employees and expects to recall 50 furloughed workers. Emerald Capital Advisors is advising Coda on its restructuring, and Houlihan Lokey is its investment banker.