Johnson Controls appeals A123 sale order to get fee and reimbursement

By Caroline Salls

Pittsburgh, Dec. 17 - Johnson Controls appealed the order approving A123 Systems, Inc.'s sale to Wanxiang, according to a Johnson Controls news release.

Johnson Controls said the court ordered the escrow of the break-up fee and expense reimbursement as part of the sale order.

Johnson Controls said it is appealing the sale order to obtain the breakup fee and expense reimbursement to which it is entitled under the stalking horse agreement with A123.

According to the release, A123 was directed to place the break-up fee and expense reimbursement in escrow after A123's creditors' committee suggested to the court that Johnson Controls was lobbying against the sale of A123 to Wanxiang.

Johnson Controls said it maintains an active government relations function that involves regular interaction with policy makers and agencies on the full range of issues relevant to the company.

Johnson Controls said the significant issue of U.S. regulatory approval required for any sale of A123 to Wanxiang has been a constant challenge dating back to Wanxiang's original failed attempt to acquire A123 earlier in 2012, before A123 filed for bankruptcy.

In the release, Johnson Controls said it has consistently maintained that national security questions tied to the core technology used in all of A123's businesses represent a risk to the sale that cannot be dismissed until resolved by the government review process.

Johnson Controls said it shares concerns that have been voiced by members of Congress and other interested parties. As a result, Johnson Controls said it will continue to monitor this process.

"Should the sale 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 Power Solutions president Alex Molinaroli said in the release.

Based in Waltham, Mass., A123 designs, develops, manufactures and sells rechargeable lithium-ion batteries and battery systems. The company filed for bankruptcy on Oct. 16 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 case number 12-12859.

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