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A Delaware bankruptcy judge yesterday approved the sale of most of the assets of failed battery manufacturer A123 Systems Inc. to the U.S. arm of Chinese auto parts conglomerate Wanxiang Group Corp. for nearly $257 million, The Associated Press reported yesterday. In asking Judge Kevin Carey to approve the sale, attorneys for A123 noted that the winning bid submitted by Wanxiang America Corp. last week was more than double an initial $125 million offer for the company's automotive battery unit by Milwaukee-based auto parts marker Johnson Controls Inc. Even though A123's defense-related business assets will be sold separately for $2.25 million to Navitas Systems, of Woodridge, Ill., Wanxiang's purchase still requires approval by the Committee for Foreign Investment in the United States, a federal interagency committee that reviews sales of U.S. companies to foreign owners. An attorney for A123 told Judge Carey that the initial 30-day review period for CFIUS expires Wednesday, and that the panel plans to continue its investigation during a 45-day extension, meaning that a decision may not come until mid-January. Waltham, Mass.-based A123, which makes lithium ion batteries for electric cars, grid storage and commercial and military applications, sought bankruptcy protection in October, three years after being awarded a $249 million Department of Energy grant.

Tribune Co., the bankrupt owner of the Chicago Tribune, Los Angeles Times, Baltimore Sun and five other daily newspapers, is interviewing bankers about selling its papers, Bloomberg News reported yesterday. The company's owners are seeking an adviser for a possible sale after Tribune exits bankruptcy, which is reportedly slated to happen by Dec. 31. Rupert Murdoch, chairman and chief executive of News Corp., will likely take a close look at Tribune's newspaper assets once they're available. The CEO of Freedom Communications has also expressed interest in acquiring Tribune Co.'s newspapers. In November, Tribune won approval from the Federal Communications Commission to transfer its television and radio licenses to new owners, including JPMorgan Chase, and hedge funds Oaktree Capital Management and Angelo, Gordon & Co.—the last hurdle to emerging from bankruptcy. U.S. Bankruptcy Judge Kevin Carey accepted Tribune's proposal to divide ownership of the newspaper and television company among its lenders in July. Tribune filed for bankruptcy after billionaire real estate developer Sam Zell orchestrated an $8.3 billion leveraged buyout of the company in 2007, just before a global recession and a slump in print advertising devastated the newspaper industry. Tribune owns eight daily newspapers, 23 television stations and stakes in more than 50 Web sites, including CareerBuilder.com. The company is valued at about $7 billion, including publishing, media and other assets, with $2.06 billion in cash, according to an April filing with the bankruptcy court.

The U.S. Department of Energy said it will not give A123 Systems Inc. the balance of a $249 million grant, a department official said Monday, a day after the bankrupt battery maker was bought by a Chinese company, Reuters reported yesterday. The official indicated that the end of the grant payouts was made clear to all parties who participated in last week's auction for the company. A123 will be sold to Wanxiang Group, pending court and regulatory approval, after the Chinese company outbid Johnson Controls Inc. of Milwaukee. Alex Molinari, president of Johnson Controls Power Solutions, said he expects the sale to be approved by the Delaware Bankruptcy Court today. Lawmakers renewed criticisms that the White House's clean energy grant to the maker of lithium ion batteries for electric cars had wasted taxpayer money. The company had received about $133 million of its $249 million grant when it filed for bankruptcy protection in October. Wanxiang, which bid $256.6 million for A123, reportedly did not request the grant money and did not anticipate receiving it. A123 received its grant as a part of the Obama administration's $2 billion stimulus initiative to promote domestic battery manufacturing.

Apple and Google, bitter rivals in smartphone technology, have joined to make a combined bid for a bundle of patents offered by photography pioneer Kodak, according to a published report, the Associated Press reported yesterday. Bloomberg News reported Saturday that Apple Inc. and Google Inc. have abandoned competing bids for the portfolio to offer a combined $500 million. The sum is the minimum Kodak can sell the patents for and still get an $830 million loan that's crucial to getting the company out of bankruptcy. Apple and Google declined to comment. Kodak filed for chapter 11 bankruptcy protection in January after struggling to adapt to the world of digital photography.

A daylong auction of property owned by Peregrine Financial Group Inc. and its disgraced chief executive, Russell Wasendorf Sr., this week raised about $1 million for creditors to the defunct brokerage, according to the court-appointed receiver, the Wall Street Journal blog reported Saturday. Michael Eidelman, the receiver appointed to liquidate Wasendorf's possessions, said that the results "exceeded our expectations" with few, if any, items left unsold at the end of the auction. Peregrine collapsed in July after Wasendorf attempted suicide, leaving a confession detailing a nearly 20-year fraud against his clients. He was arrested shortly thereafter and in September pleaded guilty to charges of mail fraud and embezzlement. Clients and creditors of the firm face an estimated $190 million shortfall, according to Ira Bodenstein, the trustee. Eidelman said he next intends to focus his efforts on selling off Wasendorf's property as well as tracking down other assets that may be returned to creditors.

Officials in Fredericksburg, Va., are moving forward with efforts to sell the U.S. National Slavery Museum's land because it still has not paid its city property taxes, the Associated Press reported today. The museum, founded by former Virginia Gov. Doug Wilder, filed for bankruptcy last year to stop the city from selling the land due to taxes that have gone unpaid since 2008. A judge dismissed the bankruptcy case in August after lawyers said the museum had reorganized and promised an anonymous donor was prepared to pay off the city's tax bill, but city treasurer Jim Haney said that no such payment has ever happened. Haney says that the museum could pay off the more than $320,000 tax bill any time before an auction. The case will get its first court hearing next Monday.

A bankruptcy court judge in Greenbelt, Md., has approved the sale of Maryland's only ski resort to a unit of a Kansas City-based real estate investment trust for $23.5 million, the Associated Press reported yesterday. The judge approved the sale of the Wisp resort to EPT Ski Properties, a unit of EPR Properties, on Tuesday. The judge also approved the sale of a golf course and other land to National Land Partners for $6.1 million. The resort filed for chapter 11 bankruptcy protection in 2011 after defaulting on nearly $30 million in loans it had received from BB&T Corp. of Winston-Salem, N.C., to build a golf course community near the ski hill. Formal closing dates for the sales are expected this month.

A123 Systems Inc., a government-backed battery manufacturer that has yet to turn a profit, is set to be the unlikely object of a bidding war when its assets hit the auction block today, Dow Jones Daily Bankruptcy Review reported Tuesday. A123, which was awarded nearly $250 million in grants from the Department of Energy in 2009 to build a factory in Michigan, filed for chapter 11 protection in October with a plan to sell its automotive-business assets, including the plant, to Milwaukee-based auto-parts manufacturer Johnson Controls Inc. Since then Wanxiang America Corp., a Chinese-owned auto-parts company, has submitted a competing bid, and other potential suitors have expressed interest in various parts of the company.

A consortium of bidders has offered Eastman Kodak Co. more than $500 million for a trove of digital patents, the Wall Street Journal reported yesterday. While a deal for the patents reportedly has not yet been reached, the bid puts the onetime photography icon a step closer to financing that could help it exit bankruptcy court. Last month, the company struck an agreement with creditors for $830 million in loans, which is premised on the condition that Kodak sells the patents for at least $500 million. The deal—which Kodak has code named Komodo, according to bankruptcy court documents—needs to close early next year for Kodak to get the much-needed cash. Once a Blue Chip company that employed 145,000 people worldwide at its peak in the 1980s, Kodak has endured a long slide as the rise of competitors and technological change ate into its lucrative near-monopoly on selling film. It now faces steep challenges as it tries to emerge from chapter 11 as a much smaller company with less diverse operations. To cut costs and raise cash, the company has laid off thousands of workers, negotiated to cut pension benefits and even put the camera-film business that made it a household name on the block.

Members of ABI's Chapter 11 Reform Commission said yesterday pointed to labor and benefits being key issues likely to surface during a host of public hearings beginning early next year, Reuters reported. "We'll be hearing from both labor and management about the way the bankruptcy code treats collective bargaining agreements, pension issues and the like," said Commission Co-Chair Robert Keach Bernstein Shur Sawyer & Nelson on an ABI media teleconference. In the handful of hearings so far, the commission has heard largely from lenders, many of whom have expressed concern that the commission would look to limit the use of secured credit. Commission members have said they are not looking to curb the use of secured credit so much as improve its transparency. The commission will also consider changes to rules that exempt derivatives contracts from certain bankruptcy rules and the effects on bankrupt retailers of a 2005 law that changed rules on treatment of leases in bankruptcy. About six or seven hearings will be held throughout the country next year. Read more: http://www.reuters.com/article/2012/12/03/bankruptcy-commission-idUSL1E…

To listen to the ABI media teleconference, please click here:
http://news.abi.org/educatonal-brief/teleconference-to-look-at-chapter-…