A123 Battery Company Files for Bankruptcy

A123 is an automotive battery company that has recently filed for bankruptcy protection. The company received a U.S. grant which was supposed to keep it going, but the money was not enough to move them forward. The government grant gave A123 $249 million to continue production and this boosted their stock prices as well. Unfortunately, stock fell to under $10 a share only six months later and never recovered. According to a spokesman from the Department of Energy, A123 was one of the companies that became a recipient to the American Recovery and Reinvestment Act.

The lithium ion battery producer was supposed to use the money given to them by the government as a result of the act to continue production and further the automotive industry, which has recently been in financial jeopardy. Unfortunately, the company spent about $132 million of the $249 million grant before it determined that it needed to go into bankruptcy regardless. Johnson Controls has offered A123 about $73 million in financing so that they continue operation as they work through the sale. The bankruptcy comes just after the Obama administration received criticism for granting funds to Solyndra, a solar company that was not able to recover after the tough economy and eventually filed for bankruptcy as a result.

As a result of the filing, A123 will be selling its business to Johnson Controls Inc. for $125 million in order to satisfy their debts. Market Watch reports that A123 was planning to strike a deal with a Chinese company called Wanxiang Group but the transaction fell through before it was finalized. If your company is currently struggling under debt and you do not believe that you have the means to recover from a tough economic disparity, then contact a bankruptcy attorney today. It may be in your best interests to file for bankruptcy and start afresh while halting creditors from contacting you and starting lawsuits. Talk to an attorney near you today for more information!