Former A123 gets OK for $15 million Fisker settlement; NEC deal nixed

By Jim Witters

Wilmington, Del., April 17 - B456 Systems, Inc. and the official committee of unsecured creditors received approval for a stipulation with Fisker Automotive, Inc. during an April 17 hearing in the U.S. Bankruptcy Court for the District of Delaware.

At the same hearing, judge Kevin J. Carey denied a request from the former A123 Systems, Inc. and NEC Corp. that would have provided $1.5 million in reimbursement for costs incurred by NEC in preparation of its bid for the debtor's assets.

Fisker settlement

Fisker filed a $48.67 million claim alleging that the company breached warranty obligations and a $91.2 million claim for rejection damages.

Under the settlement, Fisker receives a $15 million general unsecured claim against B456 Systems and all other claims will be released and waived.

Fisker also agreed to vote to support the company's Chapter 11 plan.

NEC dispute

Judge Carey's denial of the NEC request came a month after a hearing during which NEC, the debtor and the creditors committee battled over the propriety of the payment.

The debtor and NEC argued that reimbursements were authorized under a provision in the court-approved bidding procedures to parties who contributed to the value of the estate.

NEC and the debtor said NEC's participation in the asset auction helped achieve a higher price.

NEC initially sought $2.3 million in reimbursements but settled with the debtors for $1.5 million.

The creditors committee called the proposed payment "a gratuitous spending of $1.5 million."

At the time the debtor agreed to pay it - Feb. 4 - the auction had been over for two months and the payment at that time could not possibly benefit the debtor's estate, the committee said.

Carey said that the including of the reimbursement provision in the bidding procedures and leaving the decision to the debtor's business judgment "may have been inappropriate."

Confirmation postponed

Debtors' attorney Caroline A. Reckler told the court that she planned to file a motion to adjourn the plan confirmation hearing now scheduled for April 30 until May 20.

Reckler said B456 is working with Wanxiang America Corp., the buyer of most of the A123 assets, on a way to maximize the value of the remaining assets.

The discussions may result in modifications to the Chapter 11 plan, she said.

B456 was formerly A123 Systems, Inc. Based in Waltham, Mass., the company designs, develops, manufactures and sells rechargeable lithium-ion batteries and battery systems. A123 filed for bankruptcy on Oct. 16 under Chapter 11 case number 12-12859.

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