A123 Receives Govn. Payment the Day It Filed for Bankruptcy

A123 Systems has received a $946,830 payment from the US Energy Department exactly the day when it filed for Chapter 11 bankruptcy protection.

According to Reuters, the payment was approved on October 16th and was revealed in a letter shared with Sens. Chuck Grassley, R-Iowa, and John Thune, R-S.D. A123 Systems and its two affiliates filed for Chapter 11 bankruptcy protection on October 16th, a day after it reached the deadline of a $2.8 million interest payment to be made to bondholders.

At that time A123 also announced it has closed a deal to sell its automotive business to Johnson Controls for $125 million. The same day the company received almost $1 million payment from DOE, part of the $249 million clean energy grant. According to the letter from October 14th, A123 has not received the entire sum of $249 million and that there is still $115.8 million it has to receive. The company said it will still need the rest of the money if it plans to expand or update the current manufacturing capacity.

The DOE said in a statement that it “takes its responsibility to be good stewards of the taxpayers’ money very seriously.”