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China's largest auto parts maker won U.S. government approval to buy bankrupt A123 Systems Inc., a maker of electric car batteries, despite warnings by some lawmakers that the deal would transfer sensitive technology developed with U.S. government money, Reuters reported yesterday. The sale of the lithium-ion battery maker to a U.S. unit of Wanxiang Group was approved by the Committee on Foreign Investment in the United States, a government body led by the Treasury secretary. Last month, Wanxiang's U.S. unit agreed to pay $257 million for A123's automotive battery business and related assets in a bankruptcy auction, beating U.S. rival Johnson Controls Inc. of Milwaukee.

Law firm Kaye Scholer and financial adviser Capstone admitted on Monday to making "mistakes" during the bankruptcy of investment management firm GSC Group Inc., but said that they should not have to forfeit more than $10 million in fees earned from their work, Reuters reported yesterday. The U.S. Trustee Program is seeking to void the firms' fees because of their mischaracterization of Robert Manzo, a Capstone contractor who was presented to the bankruptcy court as a direct employee. Kaye Scholer served as legal counsel to GSC in bankruptcy, while Capstone was the company's financial adviser. In court papers filed earlier this month, the U.S. Trustee said that the firms covered up Manzo's contractor status and fee-sharing arrangement with Capstone, which may have served to inflate their fees.

AMR Corp. Chief Executive Tom Horton is in talks about becoming board chairman if the American Airlines parent merges with US Airways Group Inc., one of a number of signs both companies are nearing a deal that could create the world's largest airline by traffic, the Wall Street Journal reported today. The negotiations are fluid and might not result in Horton's assuming that role, as he could become a vice chairman, senior adviser, take on another role or choose to retire. Horton's future is being debated by AMR creditors and others because Doug Parker, US Airways' chairman and chief executive, is widely seen as the person who would run the combined airline as CEO. US Airways, in a November merger offer, proposed Parker assume the chief executive and chairman posts in a combined airline.

A bankruptcy court on Thursday will review a proposal by MF Global’s trustee that would return 93 percent of the firm's missing money to customers, the New York Times DealBook blog reported today. The trustee who has submitted the proposal, James W. Giddens, has also identified a way that, if sent to the judge and approved, could plug the remaining shortfall for customers in the U.S. If a series of settlements with JPMorgan and other firms fall into place, people involved in the case said, Giddens could ultimately return 100 percent of MF Global's missing money. To plug the gap, he must also pursue a small pot of money sitting in MF Global's general estate, a move that would require court approval. Even if he takes that path, foreign clients will still face significant shortfalls.

Bankruptcy Judge Kevin Gross cleared the way for solar panel parts maker Satcon Technology Corp. to speed up its auction process by two weeks after the company failed to find a lead bidder to set a floor price for its assets, Dow Jones DBR Small Cap reported today. Satcon sought to move up the auction after it failed to convince any of the 13 potential bidders who signed confidentiality agreements to put in a lead bid several weeks before the auction.

The operator of Zen Gaming Inc. filed for chapter 11 protection on Friday after struggling to make money with a business model that paid out millions of dollars to online poker players who never gambled with their own money, Dow Jones DBR Small Cap reported today. The 14-worker company tried to make money by running targeted ads on the site. Without profits, the company borrowed money from video poker inventor Ernie Moody, who is now owed about $16.9 million, according to court papers.

The Transport Workers Union of America, which represents ground workers at American Airlines, said yesterday that it has reached an agreement with US Airways Group Inc. and AMR Corp. that would grant immediate raises of 4.3 percent for its members should a merger of the two carriers take place, Reuters reported yesterday. The wage increase is spelled out in a memorandum of understanding reached over the past month with representatives of senior management at US Airways and American Airlines. The memo requires bankruptcy court approval and would take effect should the court approve a merger reorganization plan for American, which sought chapter 11 protection in November 2011.

School Specialty Inc., a money-losing distributor of non-textbook school supplies including art materials and classroom equipment, filed for bankruptcy protection and put the company on the auction block, Bloomberg News reported yesterday. School Specialty, based in Greenville, Wis., listed $494.5 million in assets and $394.5 million in debt in chapter 11 papers filed yesterday. The company has signed an asset purchase agreement with Bayside Capital Inc. for a proposed sale with competitive bidding supervised by the court, and Bayside will provide a $50 million loan, according to the statement.

Eastman Kodak Co. is looking for yet more time to put together its plan for getting out of bankruptcy, the Rochester Democrat and Chronicle reported today. In a SEC filing yesterday, Kodak said that it was in discussions with some of the lenders keeping it afloat during its chapter 11, seeking their approval to move a key deadline in Kodak’s bankruptcy. Currently, the company is required to file a chapter 11 plan by Feb. 15. According to the SEC filing, Kodak is looking to move that deadline to April 30.

Powerwave Technologies Inc., a maker of antennas and amplifiers for wireless communications, filed for chapter 11 protection after losing money in four of the past five years, Bloomberg News reported yesterday. The company, based in Santa Ana, Calif., listed debt of $396 million and assets of $213 million in a chapter 11 petition filed yesterday. The case is Powerwave Technologies Inc., 13-10134, U.S. Bankruptcy Court, District of Delaware (Wilmington).