A123 Systems (now B456 Systems) settlement cuts claims by Fisker to $15 million

Article by Anita Panait, on April 5, 2013

B456 Systems Inc., the new name of collapsed battery maker A123 Systems Inc., has reached a settlement that reduces Fisker Automotive Inc.’s claims by 89 percent from $140 million to $15 million. According to court documents filed in Wilmington, Delaware, the settlement deal with the unsecured-creditors' committee will substantially reduce the carmaker’s claim resulting from a rejection of its supply agreement and alleged breach of warranty obligations.

The committee's lawyers said that the settlement deal will benefit all unsecured creditors. In a court filing, the committee's lawyers said that the reduction will have a substantial positive effect on the value of other unsecured claims. According to the filing, the committee analyzed Fisker’s proofs of claim and believes that the settlement represents a compromise that is the “best possible outcome" for B456's estate.

As a result of the settlement, Fisker's $48.7-million breach-of-warranty claim will drop to a $15-million unsecured claim, while its $91.2-million damages claim from the rejection of its supply agreement will be disallowed, court documents say. U.S. Bankruptcy Judge Kevin Carey approved A123's disclosure statement, which is an outline of its liquidation plan used by creditors to decide how to vote on the plan.

B456 will seek court approval of the plan, which entails distributing the proceeds from liquidation of substantially all of its assets, at a hearing set on April 30, 2013. The creditors' committee said that the settlement provides that Fisker shall support the plan, thus moving the cases closer toward the “ultimate goal of confirmation.”

Karma

Fisker Automotive has introduced its first car named Karma. Karma follows the manufacturer’s Sustainable and Accountable Design dictum that the auto industry has never seen before.

Fisker knows that building, marketing, and developing cars use up a lot of resources and energy. Since it is a new company, Fisker is in the best position to improve on the car making process and redefine what people can expect from carmakers.

The carmaker steadfastly pursued ways to minimize environment impact and improve efficiency across the whole value chain. The automaker wants to be known for its commitment to accountability and sustainability.

All Fisker vehicles from the Karma onwards will be distributed globally using a network of reputable and independent retailers. In the United States, there are 45 dealers that will be selling Karma and all other Fisker vehicles. For the European market, an equal number of retailers are expected to sell Fisker cars.

The carmaker’s European retailers are currently being developed and it will be managed by Zurich’s Emil Frey Group, Copenhagen’s Nellemann, Fisker Italia, Istanbul’s BD Automotive, and other reputable importers. It will also be distributed in China by China Grand Automotive based in Shanghai.

The Fisker Karma is the first American-engineered luxury car that is developed to catch the attention of the global market. It is the only luxury car that meets the low emissions and fuel use demanded of cars in the future, making it just perfect for any city in the world.

There are other models of the Fisker Karma in the works such as the convertible. There are also plans for a lower priced line at the carmaker’s Wilmington, Delaware assembly plant.

The carmaker lives by the Uncompromised Responsible Luxury philosophy. This means that on top of fuel efficiency and low emissions, renewable materials were used at every stage from engineering, design and production to marketing. Fisker also used technologies with low environmental impact.

For instance, there are three interior wood trim choices available for the Fisker Karma. These are made using timber that was reclaimed from forest fires in California as well as those gathered from the bottom of lakes in the state of Michigan. No live trees were harvested. The 'Bridge of Weir Low Carbon Leather trim is made using a very low impact process at a facility that can be best described as self-sustaining.

Topics: a123, fisker

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