Former A123, creditors committee ink settlement with Wanxiang group

By Jim Witters

Wilmington, Del., June 28 - The official committee of unsecured creditors of B456 Systems, Inc., formerly A123 Systems, Inc., is seeking approval of a settlement with several companies collectively known as the Wanxiang entities to resolve about $13.4 million in claims, according to a June 27 filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the debtors completed the sale of substantially all of its non-government business assets to A123 Systems LLC, a newly formed, wholly owned subsidiary of Wanxiang America Corp., on Jan. 29.

The debtor also completed the sale of its government-related assets to Navitas Systems LLC.

During the course of the case, various Wanxiang entities filed claims or were assigned claims totaling more than $13.4 million, according to court documents.

The proposed settlement is among the creditors committee, the debtor A123 Systems (China) Materials Co., Ltd., A123 Systems (Zhen.Hang) Co., Ltd., A123 Systems Hong Kong, Ltd., A123 Systems Gmbh, A123 Systems LLC, and Wanxiang America Corp.

Proposed terms

The settlement agreement calls for:

• In full satisfaction of the China Materials claim, a 2008 tax liability and the intercompany claims, the liquidation trust will pay A123 Systems LLC $8.8 million in cash;

• The parties agree that no portion of the settlement payment will constitute damages with respect to indemnification claims;

• The Xinpeng claim will be allowed as a general unsecured claim of $604,927;

• The Boston Plastics claim will be allowed as a general unsecured claim of $956,953; and

• The parties agree not to pursue causes of action against each other.

A hearing to consider the propose agreement is scheduled for 11 a.m. ET on July 25.

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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