On Monday this week, EV charging equipment supplier Ecotality and five affiliates filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, District of Arizona.

The move follows early on signs of trouble, comes a month after the U.S. Energy Department suspended all payments to the company, and a warning last week on Aug 12 of the possibility of bankruptcy.

The San Francisco-based company had started with bright prospects after receiving a $99.8 million grant August 2009 to help develop the EV Project.

This was to establish a network of charging stations for cars such as the Chevrolet Volt and Nissan Leaf in major U.S. metropolitan areas.

Plans now are to auction assets Oct. 9 with a closing date two days following. Ecotality said eight parties have shown interest in the assets.

Need for the auction was due to “significant liquidity constraints and the difficulty of obtaining long-term financing,” Ecotality said.

The hope now is to avoid “fire sale liquidation” prices and get the most value for creditors.

Court filing show that the Energy Department is the largest unsecured creditor and owed $6.5 million by Ecotality affiliate Electric Transportation Engineering Corp.

Nissan North America Inc. has offed up to $1.25 million of financing to keep it operating during the bankruptcy, said Ecotality. It will need court approval before the loan can be accepted.