Business

Judge OK’s A123 Systems assets sale

Governor Deval Patrick (right) toured A123 Systems with CEO David Vieau in 2009.
David L. Ryan/Globe Staff/File 2009
Governor Deval Patrick (right) toured A123 Systems with CEO David Vieau in 2009.

WILMINGTON, Del. — A bankruptcy judge on Tuesday approved the sale of most assets of the failed Massachusetts battery maker A123 Systems Inc. to the US arm of a Chinese auto parts conglomerate, Wanxiang Group, for nearly $257 million.

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 the Milwaukee 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 US companies to foreign owners.

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An attorney for A123 told Carey the committee’s initial 30-day review period expires Wednesday, and the panel plans to continue its investigation during a 45-day extension, meaning a decision may not come until mid-January.

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Because of its role as lead bidder, Johnson Controls is entitled to a breakup fee and expense reimbursement totaling $5.5 million.

Carey ruled the breakup fee will be put in escrow pending an investigation by A123’s official creditors committee, which suggested that Johnson Controls, after losing out, is now lobbying for the government to reject the Wanxiang deal.

Carey said he was troubled by the suggestion that after participating in the auction, Johnson Controls may be working against the sale to Wanxiang.

‘‘Something has been raised here today that gives me pause,’’ Carey said, adding that putting the breakup fee in escrow was the prudent thing to do.

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Josh Feltman, an attorney for Johnson Controls, told Carey he had no personal knowledge of the company working to scuttle Wanxiang’s purchase of A123.

But he said was aware that some members of Congress opposed the sale to Wanxiang and would have preferred that Johnson Controls win the auction.

Feltman said that even if JCI were lobbying against the deal, it was entitled to its breakup fee and should not be penalized for ‘‘sympathizing with a bunch of Michigan congressional delegates.’’

Waltham-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.

Attorneys for A123 and the Department of Justice said Tuesday that they had reached an agreement resolving a Justice objection to the sale. The department had argued that A123 needed the government’s consent for the sale because of the 2009 grant.