U.S. Bankruptcy Judge Kevin Carey approved A123 Systems strategy to seek votes from creditors for its repayment plan.
According to court documents filed yesterday, March 14th, in Wilmington, Delaware, U.S. Bankruptcy Judge Kevin Carey approved the EV battery maker’s disclosure statement, which is an outline of its liquidation strategy used by creditors to vote for this plan. A123 Systems will seek court approval for the plan which offers proceeds from selling off the company’s assets at a hearing which is scheduled for April 30th.
On December 11th, A123 Systems received approval to sell most of its assets to Wanxiang’s US unit, a company considered China’s biggest auto-parts producer. Wanxiang America purchased all of A123’s commercial business, grid and automotive assets for almost $256.6 million and on January 29th the deal was approved by the Committee on Foreign Investment in the US.
The federal interagency group known as CFIUS, which is led by the Treasury Department, was the one which reviewed the sale after Congress members expressed national security concerns that this deal would allow foreign rivals to get technology developed with government backing. To comply with the government’s requests, the agreement between A123 and Wanxiang excluded the company’s government business, which was sold for $2.25 million to Illinois-based Navitas Systems.