Jump to Navigation

Chapter 11 bankruptcy offers New Jersey businesses fresh start

A company that may be able to make a significant change in the types of batteries used in cars across New Jersey and across the country filed for bankruptcy recently. The Chapter 11 bankruptcy filing came after a deal to sell control of A123 Systems Inc. to a foreign firm fell apart. The deal had come under pressure due to concern over some of the technology that could be transferred with foreign ownership.

The Chapter 11 bankruptcy filing includes a potential sale of control of the company to a firm from this country. The new ownership, if approved by the bankruptcy court, would offer A123 a total of $125 million. This includes an initial amount of $72.5 million in cash, money that would allow the company to remain in business during the bankruptcy process.

The Chinese firm who had originally offered to purchase control of A123 had made a financial offer of a total of $465 million. This much higher offer may be the subject of some debate as the bankruptcy process moves forward. However, any deal to sell control of the company will require approval by the bankruptcy court.

Like similar Chapter 11 bankruptcy cases in New Jersey, the company in this case likely sought the protections of the applicable laws to give it time to review its financial situation. This time will also allow the business to begin a restructuring that may allow it to become a more profitable pursuit. In such situations, companies often seek the relief from creditor pursuits that is offered by bankruptcy rules so that they may work towards a fresh financial start.

Source: Chicago Tribune, "Car battery-maker A123 files for Chapter 11," Julie Wernau, Oct. 16, 2012

No Comments

Leave a comment
Comment Information

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Subscribe to This Blog's Feed Visit Our
Bankruptcy Law Website

Office Location

Law Office of Robert Braverman, LLC

South Jersey
1060 North Kings Highway, Suite 333
Cherry Hill, NJ 08034
Phone: 856-254-2196 
Toll Free: 800-759-0767
Fax: 856-414-1230
Map & Directions

Willingboro Area Office
Law Office of Robert Braverman, LLC

1848 Burlington Mount Holly Rd (Route 541)
Mount Holly, NJ 08060
Phone: 856-254-2196
Toll Free: 800-759-0767
Willingboro Area Office

Center City, Philadelphia
15th Floor
1515 Market Street
Philadelphia, PA 19102
Map & Directions

Northeast Philadelphia
7909 Bustleton Avenue
Philadelphia, PA 19152
Map & Directions

FindLaw Network