A123 Systems Inc, a developer of lithium ion batteries used in electric cars, filed for Chapter 11 bankruptcy protection in October, after receiving more than $245 million in grant money from the U.S. Department of Energy.
As is common in large business bankruptcies, the company will be auctioned off to the highest bidder to raise money to repay its debts to its creditors. A123 will be auctioned next month, and one of the most interested buyers is Chinese automotive parts supplier Wanxiang.
Many are greatly opposed to the foreign company’s potential purchase of taxpayer-funded A123. Opponents of foreign participation in this auction are concerned with the prospect of technology developed using taxpayer money being acquired by a foreign nation. Other companies interested in possibly placing a bid on A123 are Japan’s NEC Corp and Germany’s Siemens AG.
Some are fearful of the potential sale to a foreign agent as a matter of national security, since A123 had various military contracts and develops technologies that are important to the nation’s infrastructure. Still others are concerned with the economic impact of domestic jobs being moving overseas.
A123’s initial Chapter 11 filing included a plan for it to be purchased by Wisconsin’s Johnson Controls for $125 million, which would keep all of the company’s assets under U.S. control. That plan will continue unless another entity makes a higher bid at next month’s auction.
The U.S. government stated that any sale of A123 Systems will be subject to its approval. The government also reserves the right to demand compensation for any company assets that were funded by the clean energy grant.
While your business’ financial difficulties may not be a matter of national security, they are still important to us. If you feel like your business is drowning in unmanageable debt, a bankruptcy attorney from Hong Law, PLC, can show you the potential benefits of filing for Chapter 11 bankruptcy. Contact us at 319-632-1400 to learn more about how we can help.
Iowa cleaning supply manufacturer Harper Brush Works Inc. has had a proposal to auction off its assets approved by a U.S. Bankruptcy Court for the Southern District of Iowa judge amid accusations that an auction will not raise more funds than an asset liquidation.
The family-owned maker of brooms, floor brushes, and other cleaning tools filed for Chapter 11 bankruptcy in May, listing its assets at $10.4 million with $10 million in liabilities.
The auction is set to open with a bid of $2.2 million for all of the Harper’s current assets. Opposing bids will be due on November 14, with the auction set to take place on the 19th.
Making the decision to auction off your business’ assets in bankruptcy is not easy. If you’re facing overwhelming business debts and are looking for relief, consulting with a business bankruptcy attorney can help you make the right decision for your circumstances.
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