U.S. Gov Gave A123 Systems $1M Grant the Day It Filed for Bankruptcy
November 19, 2012 10:05 AM
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Republican Senators want to know why the Energy Department continues to fund failing companies
A123 Systems is the provider for the battery packs used in several electric and hybrid vehicles on the U.S. market today, including the Fisker Karma. A123 produces lithium-ion batteries and was the recipient of multiple federal grants from the U.S. government.
A123 Systems filed for
Chapter 11 bankruptcy
protection on October 16 after a deal with a Chinese auto parts company that would have rescued it collapsed.
The same day the company filed for bankruptcy protection, it received a payment of $946,830 from the U.S. government as a part of its $249 million Department of Energy grant for developing clean energy technology.
The grant has an outstanding balance of $115.8 million, and A123 is still eligible for the remainder of its grant funds if it decides to update or expand its manufacturing capacity.
Republican Senators John Thune and Chuck Grassley have been vocal in opposing any federal grant money being giving to A123 and have pressed the Department of Energy to explain why grant money has been continually given to the battery maker even as it has faltered and filed for bankruptcy protection.
A spokesman for the Energy Department, Bill Gibbons, said, "The Energy Department takes its responsibility to be good stewards of the taxpayers' money very seriously."
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RE: I don't know
11/19/2012 5:28:22 PM
Yep, it's purely a gift. And oh look, the CEO of A123 was a big Obama campaign donor. Isn't that a coincidence.
RE: I don't know
11/19/2012 6:41:58 PM
Yeah, I missed the "grant" part. Those would never be repaid, except in cases of malfeasance (which would need to be proved). Malfeasance would depend on the terms of the grant.
Loan guarantees are yet another subject. I believe if any of those were given, the taxpayer is on the hook in Chapter 11 proceedings. *sigh*
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
Official: A123 Systems Files for Bankruptcy
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