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Durham energy firm American Efficient has entered Chapter 11 bankruptcy three months after federal regulators accused the company of operating “a brazen fraud scheme.”
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In its bankruptcy filing Saturday in the Western District of North Carolina, the company valued its current assets at between $1 million and $10 million, a fraction of the more than $1.1 billion the Federal Energy Regulatory Commission says American Efficient owes in fines and returned profits.
FERC this spring ordered the company to pay $722 million in civil penalties and return $410 million in profits, with interest. The agency’s five commissioners, three Republicans and two Democrats, all supported the ruling. This fine was more than double FERC’s previous record.
According to FERC, American Efficient bilked ratepayers by bidding energy-efficiency capacity it didn’t control into regional markets. Most of the company’s profits came from selling to the nation’s biggest electrical grid operator, PJM Interconnection, over a decade starting in 2014. American Efficient has denied wrongdoing, arguing it followed the market rules as written at the time.
American Efficient listed FERC’s $1.13 billion “alleged penalty order” as its main liability on its July 18 bankruptcy filing. The company also named multiple law firms and state tax departments as smaller creditors. For example, it owes the North Carolina Department of Revenue $105,122 in taxes.
Chapter 11 affords companies protection from creditors while parties work out a repayment plan under the supervision of a court. But the gulf between the assets American Efficient says it has and the money FERC demands will likely affect how the case proceeds, said Ed Boltz, a bankruptcy attorney in Durham with the Law Offices of John T. Orcutt.
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“That’s going to color the direction of the bankruptcy, obviously, because I don’t know how you reorganize your way around that amount,” he said.
Courts in rare instances hold business members liable for their entities’ debts through a legal doctrine known as “piercing the corporate veil.” Boltz said this can happen in cases of fraud, though judges are generally disinclined to break the protection offered to limited liability companies.
American Efficient is headquartered on Foster Street in downtown Durham. It has not paid FERC as it continues to challenge the ruling in federal court.
The company declined to comment on its bankruptcy filing, which also named three affiliated businesses. Each is managed by Benjamin Abram, head of the American Efficient holding company.
Abram is the husband of state Sen. Sophia Chitlik, a Democrat representing Durham. The News & Observer previously reported that Chitlik lobbied on behalf of American Efficient in 2024.
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This story was originally published July 22, 2026 at 11:57 AM.