Updating a blog we brought you last month, battery manufacturer A123 Systems Inc is facing pushback in its bankruptcy case because of a $249 million grant it received from the US Department of Energy.
A123 filed for Chapter 11 bankruptcy last month, hoping to restructure and sell itself to investors. According to Reuters, Johnson Controls Inc. of Milwaukee and China’s Wanxiang Group Corp will make offers to purchase A123, which makes lithium ion batteries for electric cars.
Last week, the federal government objected to the company’s proposed sale, saying “approval was needed before the government’s clean energy grant could be assigned to a buyer.”
According to Reuters, the “prospect of a U.S. government-financed company being sold to a Chinese rival has drawn opposition from some politicians, who say technology underwritten by U.S. taxpayers should not fall into foreign hands.”
Two of A123’s battery manufacturing plants located in Michigan were paid for with the help of a $249 million government grant from stimulus funds. It will be interesting to see if the government can work out an agreement with A123 or its potential buyers over the balance of the grant.
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Law Firm of Kevin D. Judd