A123 wins bankruptcy court approval of asset sale

Published on NewsOK Modified: December 11, 2012 at 5:11 pm •  Published: December 11, 2012

Feltman said that even if JCI were lobbying against the deal, it was still entitled to its breakup fee and should not be penalized for "sympathizing with a bunch of Michigan congressional delegates."

Waltham, Mass.-based A123, which makes lithium ion batteries for electric cars, grid storage and commercial and military applications, sought bankruptcy protection in October, three years after being awarded a $249 million Department of Energy grant.

Attorneys for A123 and the Department of Justice said Tuesday that they had reached an agreement resolving a DOJ objection to the sale. The DOJ had argued that A123 needed the government's consent for the sale because of the 2009 grant.

Under the deal, Wanxiang will acquire A123's automotive, grid and commercial business assets, including all technology, products, customer contracts and U.S. facilities in Michigan, Massachusetts and Missouri. It will also get A123's cathode powder manufacturing operations in China and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123's joint venture with Shanghai Automotive.

Wanxiang has agreed that if it does not receive CFIUS approval by the time the sale closes, it will set up a trust that will become the new owner of A123. The trust would own and operate A123 until CFIUS decides whether to approve Wanxiang's purchase. If CFIUS approves the sale, the trust will be dissolved and the assets will pass to Wanxiang. If CFIUS refuses to approve the sale, the trust will dispose of A123's assets for the benefit of Wanxiang.

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