Ascend Elements Settles a Fraud Claim with the Department of Energy.
A $7.5 million settlement closes out one piece of the Apex 1 situation. Fixing the actual facility will cost a lot more.
One of the things that caused the halt of construction of Ascend Elements’ Kentucky Lithium-ion recycling facility back in 2024 was a billing dispute. Ascend says it got overcharged.
As described in greater detail in the Credit Bid Motion, that review, together with a subsequent audit, identified substantial concerns regarding certain charges billed in connection with the project, including charges attributed to RMF Nooter, LLC. Among other things, the audit indicated that RMF Nooter overbilled the Debtors by at least $16 million, including nearly $6 million in excess or duplicative labor costs.
The review also identified substantial excessive or duplicative equipment and tool charges, questionable crane-related costs, large tool purchases and transfers that were not properly credited to the Apex 1 project, and other wasteful or unnecessary expenses. ~ Document 208
The actual trigger for the halt at Kentucky was a stop-work notice. TKJV claimed Ascend let more than $41.5 million in approved invoices go delinquent, issued a seven-day stop-work notice in late October 2024, then Ascend suspended all work on November 1.
A former RMF Nooter employee described the Project’s site culture as one in which there was a “barrel full of money”. that people were intent on spending.
The numbers back that up:
Seven days where billed work exceeded twenty hours
2,377.5 double-time hours
251 holiday hours
218.28 Sunday hours.
TKJV earned a flat 5% fee on total project costs, so every dollar RMF Nooter claimed on an invoice was a dollar TKJV got paid to wave through.
An example of Ascend's claims of wrongdoing by RMF Nooter and TKJV.
Ascend asked RMF Nooter in June 2024 to survey equipment for a piping misalignment issue on the mechanical vapor recompression (MVR) system. An MVR takes the waste heat and vapor from processes and, by using a compressor, increases the pressure and heat so it can be used in later stages. This MVR survey was due in eight days. RMF Nooter missed it, asked for a month long extension, then missed that too.
By August Ascend had to escalate straight to TKJV because a vendor rep was sitting on site waiting on data that was now nearly eight weeks late. Then, less than a month after that RMF Nooter's own superintendent on the MVR claimed he had no idea what was going on with the system.
Ascend's construction manager's read on it: the guy "was looking for reasons to not do any work."
At one point they had crews spending hours wondering around the site looking for missing equipment. At least ninety-six non-compliance reports were issued during construction, and Ascend believes the actual volume of defective work is much higher.
When Ascend finally pulled the plug on the project, they also accused TKJV of not properly winding the site down. Water in electrical cabinets, leaking roofs, exposed cable reels, and roughly eighty pieces of rented equipment that never got returned. This would explain why during my Q&A with Ascend they mentioned that the site had now been properly winterized.
The $16 million in alleged overbilling is separate from what it will actually cost to fix what's wrong with the facility itself.
The Credit Bid Motion puts the cost of redoing the defective and nonconforming work at "an estimated cost in the tens of millions of dollars," and says the facility "cannot be utilized in its current state" until that's done.
So even setting the billing dispute aside entirely, there’s a second, larger bill just to make the site functional on top of finishing the facility, which court filings list at 60% complete with $547 million invested, including the DOE grant.
RMF Nooter filed a roughly $40 million mechanic's lien over the unpaid bills.
They also objected to the restructuring firm Ascend brought in, Alvarez & Marsal (A&M), arguing the $1.5 million completion fee A&M stood to collect regardless of sale price or creditor recovery would eat into distributions for everyone, RMF Nooter included.
RMF Nooter also flagged that A&M has client relationships with Doral Energy and Fifth Wall, both of which are noteholders, equity holders, and contributors to the stalking horse bidder, the same parties A&M's CRO is supposed to be holding at arm's length.
Throughout the bankruptcy proceedings, RMF Nooter objected to any motion by Ascend that would involve allocating capital to anything other than the creditors. During a hearing on the DIP financing, Ascend's lawyer insinuated that RMF Nooter would prefer to sell off the company's option (referred to as an obligation by Jefferies' representative) to purchase land in Poland, which was essential to fulfill the contractual agreements with the Polish government regarding the grants they would provide.
Instead of allowing Ascend to continue operating in Poland, RMF Nooter wanted to use the proceeds from that kind of sale to reimburse creditors.
On the DOE side
Ascend isn't disputing what happened. Inflated labor hours, excessive tool purchases, equipment rentals nobody needed, all billed through for reimbursement. What it's not conceding is liability under the False Claims Act.
The settlement says flat out that it's neither an admission by Ascend nor a concession by the government that its claims weren't well founded. Nobody's declaring a winner here.
DOE paid out $5.3 million on the inflated claims between September 2023 and February 2025. The audit was initiated after a former subcontractor employee voluntarily disclosed information to Ascend.
There is no dates listed in the filings for when the audit was conducted, but Ascend disclosed the problem to DOJ and DOE in February 2025, then roughly one month later the company replaced Michael O’Kronley as CEO with Linh Austin.
Total settlement: $7.5 million.
Of that, $5.3 million is restitution, same number DOE paid out. The rest is the penalty stacked on top. In exchange DOE drops claims under the False Claims Act, the Program Fraud Civil Remedies Act, and the Contract Disputes Act, plus the usual common law grab bag: breach of contract, payment by mistake, unjust enrichment, and fraud.
This only covers Ascend as a company. Individual liability is carved out and preserved, so nobody employed now or in the past gets a free pass on this conduct just because the corporate entity settled.
If the settlement falls through or gets unwound later, the government's claim reverts to the full $16 million, the original exposure number, plus penalties. So Ascend settled for under half of worst case, before counting what years of FCA litigation would have cost in legal fees alone.
The funds to pay off the DOE are a setoff against the closeout audit of the same DOE grant that funded Apex 1, so no cash payment from Ascend is required. It just zeroes out the contract and lets them close the grant. This, however, doesn't dismiss the DOE's reversionary claims on the equipment that was purchased and installed using grant money.
There are still some fiddleybits and assets left in the bankruptcy, with the main one being Apex 0, the Black Mass processing facility in Georgia. So far, the only real information related to that is the $5 million credit bid proposed by the Junior Note Holders, a filing by the landlord of the Covington location for close to $900k in damages to the property, and a company that is leasing out a parking lot and tractor trailers for storage who is owed for unpaid bills as well.
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