An attorney for fuel-cell manufacturer ClearEdge Power said in a letter to state officials that a sudden business downturn and cash flow shortfall led it to shutter its two South Windsor facilities and lay off 268 employees.
The company, which closed abruptly last week, is winding down operations and intends to file for bankruptcy, attorney David J. Murphy wrote in the letter dated April 25.
He said ClearEdge had hoped to receive a significant contract from a customer, which would have brought in bridge financing to keep the company operating. But that contract was delayed for “many months.”
Murphy said the company was also having problems collecting money it was owed by customers.
“Moreover, the company’s potential lenders and equity investors similarly have declined to change their position and finalize any additional financing or equity infusion,” Murphy wrote.
The company has not yet filed for bankruptcy.
Meanwhile, an employee of the company filed a class action lawsuit Monday in U.S. District Court in California, alleging that ClearEdge violated the Worker Adjustment and Retraining Notification (WARN) Act by failing to notify employees 60 days in advance of the closing and provide related pay and benefits.
The employees want the sum of the unpaid wages, commissions, bonuses, accrued holiday and vacation pay, and other benefits.
ClearEdge’s attorney said in the letter to the state that the company would have filed a required notice about the closure at an earlier time, the letter said, but the company felt such a notice would have compromised its efforts to win the customer contract and collect account receivables.
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