Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Chinese Buyer Changes Bankrupt A123 Systems' Name to B456
Author: Joel R. Glucksman
Date: April 18, 2013
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In a streak of creativity following its purchase of bankrupt battery maker A123 Systems, Chinese firm Wanxiang Group changed the company’s name to B456 Systems and announced its plans to renew operations within the U.S.
After filing the new name with the U.S. Securities and Exchange Commission, Wanxiang said it plans to maintain the company’s three plants in Michigan. Prior to filing for bankruptcy protection under Chapter 11 of the Bankruptcy Code, A123 had secured a $249 million grant from the Energy Department to expand production, as well as $125 million in tax credits and grants from the state of Michigan in 2008 and 2009.
Although the sale to Wanxiang Group has been finalized, the company may continue to face financial challenges in the future. Michigan has filed a petition with the U.S. Bankruptcy Court to block Wanxiang Group from obtaining some of those incentives.
Further, Fisker Automotive – a primary client of A123 Systems – is facing significant financial challenges that are prompting it to consider filing for bankruptcy itself. Although the company is searching for investors, it has yet to garner interest from financial backers and has already retained the services of a bankruptcy law firm to help it plan accordingly.
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