Firefly Energy Folds, Local Government Backed Six Million In Loans

By Tom McIntyre

July 15, 2010 Updated Mar 12, 2010 at 11:39 PM CDT

Firefly Energy, the Peoria-based start-up company that has served as a sort of a poster child for the local high-tech movement, is closing.

Firefly's CEO Ed Williams just confirmed the news. He says the worldwide financial crisis has had a negative impact on many small businesses including his company.

Williams said, "After 15 months of unsuccessful attempts to raise $20 million in equity capital, in the midst of this world-wide financial crisis, funds that would have enabled the Company’s transition to full production and commercial sales, the Firefly Energy Board has decided to cease operations and voluntarily file for Chapter 7 bankruptcy."

It was founded in 2003 as a spin-off from Caterpillar. Known for it's breakthrough battery technology, Firefly employed about 40 people locally.

It's leaders developed the technology for a lighter, more powerful lead-acid battery..gaining financial support of the federal government along with local and state dollars.

Firefly's biggest customer was the U-S military. Hopes for breaking into the commercial battery market never materialized.

Williams said, "The Firefly staff would like to sincerely thank the Peoria community for their tremendous support since we started our venture seven years ago. This decision was very difficult, and while regrettable, it is our only viable option."

The city of Peoria and Peoria County released a joint statement this evening about the failure of the company.

Local governments had guaranteed six million dollars in loans to Firefly.

The statement from Peoria City Manager Scott Moore and Peoria County Administrator Patrick Urich said both Governments would attempt to get their loans back, in the form of property--real or intellectual.

"As guarantors, the City and County are determined to exercise their full legal rights to protect their interests. In the worst case, the City and County might lose their $6 million guarantee. In the likely case, the governments will pursue by legal means the pledged collateral, the physical and intellectual assets of Firefly Energy, Inc., to reduce any investment losses that may be realized by the City and County. We believe that the value of these assets is considerable and will reduce any amounts that may need to be paid by the City and County as guarantors".

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