Former A123, committee ink $3 million product sales claim settlement

By Caroline Salls

Pittsburgh, June 17 - The official committee of unsecured creditors for B456 Systems, Inc., formerly A123 Systems, Inc., requested court approval of a settlement with Smith Electric Vehicles Corp., according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The committee said A123 and Smith Electric were parties to an agreement under which A123 supplied Smith Electric with lithium ion battery packs and modules for use in its electric vehicle programs.

In November 2012, A123 identified the product sales agreement as an executory contract subject to assumption and assignment and asserted a cure amount of $0.00 for the agreement.

Smith objected to the cure notice and filed an $8.33 million claim. On March 7, Smith Electric filed a separate $10.12 million claim for alleged damages related to breaches of warranty obligations.

Under the proposed settlement, Smith Electric will have a $3 million general unsecured claim against B456 and will waive all other claims.

A hearing is scheduled for 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, 2012 under Chapter 11 case number 12-12859.

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