A123 Systems files joint plan of liquidation and disclosure statement

By Jim Witters

Wilmington, Del., Feb. 6 - A123 Systems, Inc. filed its joint plan of liquidation and associated disclosure statement on Feb. 6 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported the company sold substantially all of its non-government business for $256.6 million in cash to A123 Systems LLC, a newly formed, wholly owned subsidiary of Wanxiang America Corp.

The government-related business assets were sold to Navitas Systems LLC for $2.25 million.

The proposed plan calls for the liquidation of the estates' assets, including the investigation and prosecution of causes of action, by a liquidation trust.

All proceeds of the liquidation will be used for cash disbursements under the plan.

A hearing to consider the adequacy of the disclosure statement is scheduled for 10 a.m. ET on March 13.

Creditor treatment

Under the proposed liquidation plan, treatment of creditors includes:

• Holders of allowed administrative claims, fee claims and priority tax claims will be paid in full;

• Holders of allowed remaining secured claims, priority non-tax claims and convenience claims - which are claims of $10,000 or less or an amount greater than $10,000 but reduced to $10,000 - will be paid in full;

• Allowed general unsecured claims, senior notes claims and subordinated notes claims will receive a share of the available cash in the liquidating trust;

• If any cash remains, subordinated other claims, subordinated stock claims and A123 interests will receive a share of the available cash;

• A123 Sysems common stock will be canceled; and

• Holders of subsidiary interests will receive no distributions.

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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