Failed bidder for battery maker A123 appeals decision to sell to Chinese company
Dec 17, 2012 (Menafn - The Washington Times - McClatchy-Tribune Information Services via COMTEX) --An American company that lost out in its bid for the assets of a failed, federally backed battery maker is appealing a judge's decision last week selling the company to a Chinese competitor.
The sale of A123 Systems, which went broke despite a nearly quarter-billion-dollar federal grant, to Chinese-based Wanxiang has promoted critics in Congress to urge the federal government to intervene and block the sale on national security and other grounds.
The Milwaukee-based Johnson Controls filed its appeal with the U.S. Bankruptcy Court in Delaware early Monday, saying the company should have been paid a so-called "break-up fee" and expense reimbursement in the deal selling A123.
The company also said it's ready to make another bid for A123 if the deal to Wanxiang falls apart -- which remains a possibility.
"Should the estate of A123 Systems to Wanxiang not be completed for any reason, Johnson Controls remains open to considering future opportunities to acquire relevant portions of A123's assets, keeping this critically important technology in the United States, preserving jobs and furthering the purpose of the American Reinvestment and Recovery Act," Johnson Controls President Alex Molinaroli said.
While A123 received approval for a 249 billion federal grant through the Recovery Act, it only received about half of the money before filing for bankruptcy protection earlier this year. The funds were intended to create thousands of American jobs, but a review by The Washington Times of government job tracking data showed only about 400 new jobs created.
A bankruptcy judge gave approval last week for Wanziang to buy most of A123's assets, though the failed battery maker's government contracting business would go to another company based in the U.S. under the deal.
The 257 million sale, however, still requires approval from the Committee on Foreign Investment in the United States, a federal entity charged with reviewing proposed sales of U.S. companies to foreign buyers.
Soon after a judge signed off on the deal, A123's chief executive, Dave Vieau, issued a statement backing the sale to Wanxiang even as some politicians in Washington continued raising concerns.
"We believe the acquisition by Wanxiang will provide A123 with the financial support necessary to strengthen our competitive position ... and we look forward to completing the sale," Mr. Vieau said.
But Republican Sens. Chuck Grassley of Iowa and John Thune of South Dakota issued a joint statement last week calling for a "full review" of the bankruptcy transaction by the federal government.
"In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns," the lawmakers said.
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