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A123 Bankruptcy Auction Set For December 6th By Court

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Lithium Ion Phosphate Auto Battery cell

Lithium Ion Phosphate Auto Battery cell

Ailing battery firm A123 Systems, which supplies batteries to Fisker, BMW and GM among others, could soon have a new owner after Delaware courts have imposed a deadline for bids.

Two companies vying for A123 and its assets are auto-parts maker Johnson Controls, and Chinese auto-parts maker Wanxiang Group.

Associated Press reports the new December 6 date has been set in place, in lieu of a November deadline, to allow more companies to compete for the bankrupt battery company.

Wangxiang Group is currently the leading bidder on A123. The company previously put forward a $465 million rescue deal for A123, which fell through when A123 was unable to meet some of the Chinese company's agreement criteria.

Johnson Controls then put in a debtor-in-possession loan, subsequently withdrawn to allow bidding from Wangxiang to go ahead. Johnson Controls still intends to acquire A123's automotive assets with a $125 million bid.

Wangxiang is currently seeking regulatory approval for its bid, from both the Committee of Foreign Investment in the U.S, and the Government of China.

The company is confident it will gain approval, but A123 had previously wanted an earlier bid deadline to guarantee Johnson Controls the sale--just in case the Chinese bid couldn't continue.

Meanwhile, a judge has approved a performance-based incentive plan at A123 for ten senior employees, and a retention plan of $2.4 million for 66 existing A123 employees.

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Comments (3)
  1. Could this cause production delays for upcoming BMW and GM plug-in cars? I'd especially like to know what effect this may have on BMW-i.
     
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  2. I'd like to see the court shoot down all the executive packages that they are asking for (18 months salary and bonus for C** levels at A123) and distribute the sales income as dividend to stock-holders. These guys ran the company poorly and want to maintain over $4.2 million in cash to pay-off the executives. "retention bonuses" they say. The board of directors should have canned them and put real business leaders in there.

    Google "CEO A123 gaffe of week Again!" and read Motley Fool's Nov 9th article.
     
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  3. "I'd like to see the court shoot down all the executive packages that they are asking for"

    This would lead to them quitting. Company will cease to exist. It would screw A123 employees, creditors and customers.

    Suggesting dividends payout for bankrupt company is insane and stupid. Plus that would be illegal - just like robberies are illegal. Such action would be an act of steal from creditors.
     
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