Northern Power Systems seeks bankruptcy protection
June 9, 2008
By DAVID DELCORE Times Argus Staff
WAITSFIELD — Northern Power Systems could soon be changing hands.
Last week the Waitsfield-based wind turbine manufacturer and its parent company, Distributed Energy Systems Corp. of Connecticut, sought bankruptcy protection in a move they claim will facilitate the sale of both Northern Power and another wholly owned subsidiary of Distributed Energy, Proton Energy Systems Inc.
Officials from Distributed Energy said Wednesday's voluntary filings of the Chapter 11 petitions in U.S. Bankruptcy Court in Delaware were necessary to complete "going-concern sales" of Northern Power and Proton Energy, while maximizing the value of the two subsidiaries and minimizing potential disruption in the interim.
Bernard Cherry, chief executive officer of Distributed Energy, said he expects the company to function normally during the Chapter 11 process.
"We intend to use the Chapter 11 process as a strategic vehicle to obtain the time and legal protection necessary to complete a structured sale of our two primary operating units (Northern Power and Proton Energy), and to maintain the going concern value of both business units," Cherry said.
"Our dedication to providing our customers with the highest quality products and services will remain strong during this strategic process," he added.
Distributed Energy, which came into being following the 2003 merger of Northern Power and Proton Energy, has reportedly secured a $2 million line of credit that will help it meet payroll, pay vendors and provide uninterrupted service to its customers during the Chapter 11 process.
Contacted for comment Friday, employees at Northern Power referred all questions to spokeswoman Maureen McCracken. Attempts to reach McCracken were unsuccessful.
Northern Power's financial difficulties, including a decline in both the growth and volume of its business, were cited as driving factors in the bankruptcy filings. Proton Energy, which designs, develops, sells and manufactures on-site hydrogen gas delivery systems, did not seek bankruptcy protection.
Founded in 1974, Northern Power was a growing business, boasting more than 200 employees following the 2003 merger. Those numbers have since dropped sharply and most of the 175 people employed by Distributed Energy Systems are employed at Proton Energy.
According to at least one published report, a venture capital firm New Enterprises Associates Inc. is said to be interested in acquiring Northern Power.
