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Chinese automotive equipment giant Wanxiang has already given up a lot in its $256.6 million winning bid to take over bankrupt U.S. battery maker A123, SeekingAlpha.com reported Sunday. Not only has it said goodbye to A123's U.S. government work, it has lost the remaining $120 million or so of a $249 million Department of Energy grant that's helped build A123's lithium-ion factories in Michigan— plants that Wanxiang says it will keep open. But political opponents of A123's sale to a Chinese company are saying that may not be enough. Even A123's commercial technology is inextricably linked back to its federally funded work with partners like DOE and the Department of Defense, they say. That could allow Wanxiang to develop military applications based on A123's U.S.-funded technology, it is claimed—and that's enough reason to block the sale. These are some of the issues facing the Committee on Foreign Investment in the U.S. The committee chaired by Treasury Secretary Tim Geithner is in charge of deciding just what parts of a proposed sale of A123's assets and intellectual property might constitute a national security risk. This week, the group began a 45-day review of the sale, with a deadline of Jan. 15, 2013, to make a decision.

The U.S. Supreme Court refused on Monday to resolve the question of what happens to the license to use a trademark when the owner of that trademark goes through bankruptcy, Reuters reported yesterday. In an order without comment, the high court rejected a request from Jarden Consumer Solutions to help settle a conflict between federal courts of appeal over whether trademark licenses survive bankruptcy. The case involves Lakewood Engineering & Manufacturing Co., a consumer products company that outsourced the manufacturing of box fans bearing its trademark to Chicago American Manufacturing. Lakewood's creditors in 2009 filed an involuntary bankruptcy petition against the company. The bankruptcy trustee rejected Lakewood's supply contract with Chicago American and sold the bulk of Lakewood's assets to the highest bidder, Jarden. Chicago American continued to produce fans with the Lakewood trademark, prompting a lawsuit by the trustee and later Jarden for trademark infringement. But the bankruptcy court found that even though the trustee had rejected the contract, Chicago American could continue to use the Lakewood trademark. In 1988, Congress changed the Bankruptcy Code to allow holders of intellectual property licenses from a debtor to retain their rights even if a trustee rejects the licensing agreement in a bankruptcy. However, in its definition of "intellectual property," Congress included patents and copyrights but not trademarks. "We think this is going to interfere with the bankruptcy process and lead to the dilution of trademark rights by creating uncertainty regarding the parties' trademark rights and obligations post-rejection in bankruptcy," said Leonard Feldman, Jarden's appellate lawyer at Stoel Rives. The case is Sunbeam Products Inc v. Chicago American Manufacturing, No. 12-431.

A bankruptcy trustee and government lawyers have settled accusations that the Obama administration mishandled a multimillion-dollar loan awarded to a wireless company in the waning days of the George W. Bush administration, leading the business to go broke and lay off hundreds of workers, The Washington Times reported yesterday. The settlement comes months after the trustee filed court papers faulting the Federal Communications Commission and the U.S. Department of Agriculture for the collapse of Colorado-based Open Range Communications. Open Range went bankrupt last year, owing taxpayers more than $70 million. The company closed on a $267 million federal loan guarantee in 2008 days before the Obama administration took office. Under the loan agreement with the USDA's Rural Utilities Service, Open Range was supposed to deploy broadband service in hundreds of rural communities in 17 states. But after the company went bankrupt within a few years, trustee Charles Forman blamed federal officials for mishandling the loan and spurring the company's collapse. Under the settlement, which still must be approved by a judge, the federal government would receive $1.75 million from an escrow account and more than one-third of whatever money the bankruptcy trustee receives from lawsuits against investors and former company officials.

The U.S. Internal Revenue Service yesterday appealed a court decision to approve solar panel maker Solyndra's plan to exit bankruptcy protection, Reuters reported. Solyndra, which filed for bankruptcy in September last year despite a $528 million federal loan, won court approval on Oct. 22 to repay its creditors after a judge overruled objections by the U.S. government. Bankruptcy Judge Mary Walrath had rejected the government argument that the plan was improper because its main purpose was to provide tax breaks. Venture capital firms Argonaut Private Equity and Madrone Capital Partners will control Solyndra's tax breaks, known as net operating losses, that are potentially worth $341 million after the bankruptcy. The Internal Revenue Service had told the judge that the government might appeal and requested Judge Walrath to delay the repayment plan by 10 days.

Hurricane Sandy caused massive disruptions to U.S. businesses and threatened billions of dollars in damage to a region packed with corporate headquarters, retail stores and transportation hubs, the Wall Street Journal reported today. Estimates for the financial consequences of the storm in the U.S. run to the billions of dollars. Disaster-modeling company Eqecat said the storm could cost the insurers between $5 billion and $10 billion. The Global Business Travel Association last year estimated that a large hurricane costs airlines, Amtrak, rental car companies and hotels nearly $700 million in lost or deferred business-travel spending. The broader impacts on the U.S. economy should be "noticeable but temporary," said economists at Moody's Analytics.

TerreStar Corp. won court approval of a chapter 11 plan that hands ownership of the mobile-telecommunications company to several investors that specialize in distressed debt, Dow Jones Daily Bankruptcy Review. Bankruptcy Judge Sean H. Lane on Wednesday confirmed TerreStar's chapter 11 reorganization plan. The ruling paves the way for the company to exit bankruptcy protection under the ownership of such shareholders as hedge-fund managers Highland Capital Management, Solus Alternative Asset Management and West Face Capital. Each will have a seat on TerreStar's new board. The investors are among TerreStar's preferred shareholders, whose old shares will be canceled in favor of new common shares in the restructured company. They are among lenders behind a bankruptcy-exit loan of up to $27.5 million.

Philip Falcone's bankrupt LightSquared Inc. won court permission to award bonuses to four key executives under a revised plan that pays them the most if the company sells its assets or exits bankruptcy before July, Bloomberg News reported yesterday. Bankruptcy Judge Shelley Chapman approved the amended plan after LightSquared resolved concerns raised by a group of lenders owning $1.1 billion in debt and the U.S. Trustee in the case. While the executives, including Chief Executive Officer Douglas Smith and Chief Financial Officer Marc Montagner, may be paid more under the new plan, it requires them to exit bankruptcy sooner and keep the company to a strict budget, Matthew Barr, a LightSquared lawyer, told Chapman today. Managers also have an incentive to meet three regulatory milestones by Dec. 31, 2013, Barr said.

A fourth Texas high-tech startup that received taxpayer money through Gov. Rick Perry's (R) signature economic development fund has filed for bankruptcy, pushing the total losses in the $194 million portfolio beyond what the state says the fund has earned, the Associated Press reported yesterday. The collapse of bioenergy producer Terrabon Inc., which was awarded $2.75 million in 2010 and was backed by large Perry political donors, raises the question of whether the state's Emerging Technology Fund that began in 2006 is now worth less than what taxpayers have put into it. The state's venture capital-like fund has raised concerns about accountability and transparency, including a critical report from the state auditor's office last year. Terrabon's bankruptcy, which was filed in September, is the tech fund's biggest bust to date and brings the total amount of failed investments to $5.25 million.

Bargain hunters spent $180,000 scooping up office furnishings and video-game equipment formerly belonging to 38 Studios LLC at the company's Maryland bankruptcy auction Monday, the court-appointed receiver in the case announced yesterday, Providence (R.I.) Business News reported. The first of two auctions scheduled to liquidate 38 Studios’ modest physical assets, the Oct. 16 sale outside Baltimore saw approximately 950 items purchased, including furniture, computers, video-game consoles and other trappings of the defunct game-maker. The proceeds of the auction will go to offset 38 Studios’ $150 million in outstanding debt, with the majority going to the state of Rhode Island to offset the liability of a $75 million loan guarantee made granted the company in 2010. An auction of 38 Studios’ items at its Rhode Island headquarters is scheduled for Tuesday, Oct. 23 at in Providence.

Solyndra LLC, the solar-panel maker that received a $535 million U.S. Energy Department loan guarantee before going bankrupt, won’t be able to provide lenders ranking ahead of the government with a full recovery, the company's financial adviser Eric Carlson said yesterday, Bloomberg News reported. The failed solar-panel maker generated about $117 million from assets sales, including the proposed sale of its manufacturing facility to a unit of Dublin-based Seagate Technology Plc for $90.3 million, subject to competing offers at a Nov. 14 auction, Carlson testified under questioning from Solyndra lawyer Maxim Litvak. The company incurred about $46 million in costs to achieve those sales, giving it about $71 million in net distributable assets. Lenders who rank ahead of the government, Argonaut Ventures I LLC and Madrone Partners LP, are owed about $77 million, about $6 million short of a full recovery, said Carlson of Imperial Capital.