Johnson Controls Inc. (JCI:US) and China’s Wanxiang Group Corp., competing bidders for assets of bankrupt A123 Systems Inc. (AONEQ:US), tried to convince a judge today that their preferred auction dates should prevail.
Johnson Controls told U.S. Bankruptcy Judge Kevin Carey that Dec. 3 would be the best date, while Wanxiang said it presented a “qualified” bid to A123 and is seeking a Dec. 10 date, according to testimony in Wilmington, Delaware.
“My client does not consent to an extension beyond Dec. 3,” Joshua Feltman, an attorney for Johnson Controls, told Carey.
A123 Systems Inc., a maker of electric-car batteries that received a $249.1 million federal grant, is asking Carey to establish procedures for conducting a court-supervised auction.
A123, based in Waltham, Massachusetts, filed for bankruptcy protection last month with plans to sell its automotive-business assets to Milwaukee-based Johnson Controls for about $125 million. Last week, a unit of Wanxiang said it wants to be the lead bidder for all of A123’s assets.
A123 has received interim approval for a $50 million loan from Wanxiang, replacing Johnson Controls as the lender for its Chapter 11 case. Johnson Controls said it withdrew as the lender to avoid a fight over the financing.
Also objecting to parts of the sale process were the official committee of unsecured creditors, the U.S. Trustee’s office, Wanxiang and patent holders.
A123 asked the court to deny Wanxiang America Corp.’s request to delay the sale process by 30 days, saying Wanxiang “may not be able to secure the governmental regulatory approvals it is seeking even under this extended timeline.”
Wanxiang is pursuing approval from the Committee on Foreign Investment in the U.S. “to protect itself from the risk that the sale could subsequently be unwound,” A123 lawyers said in court papers.
U.S. Republican Senators John Thune of South Dakota and Chuck Grassley of Iowa expressed concerns about A123’s financing deal with Wanxiang in a letter to U.S. Treasury Secretary Timothy Geithner.
“A123 has received millions of taxpayer dollars to develop technology and intellectual property that should not simply be shipped to China,” Thune said in a statement.
In its Chapter 11 bankruptcy petition, A123 listed assets of $459.8 million and debt of $376 million as of Aug. 31.
The case is In re A123 Systems Inc., 12-12859, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Dawn McCarty in Wilmington, Delaware, at firstname.lastname@example.org
To contact the editor responsible for this story: John Pickering at email@example.com