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Waltham-Based Battery Maker A123 Files For Bankruptcy Protection

BOSTON — Short of cash and hurting from slow sales of electric cars, battery maker A123 Systems Inc. sent its U.S. operations into bankruptcy protection on Tuesday and quickly sold its automotive assets.

The announcement Tuesday comes one day after A123, based in Waltham, warned in a regulatory filing that it likely would miss some debt payments and could be headed for bankruptcy court.

Gov. Deval Patrick says he’s not concerned that the company owes the state $2.5 million. The state says it expects to recover what it’s still owed.

The Massachusetts Clean Energy Center, a state agency, plans to file a claim in bankruptcy court to recover the funds, which were part of a $5 million loan disbursed two years ago.

A123 said in a statement that auto parts maker Johnson Controls Inc. would buy its automotive business assets for $125 million. The company’s subsidiaries outside the U.S. were not included in the bankruptcy filing, the company said.

The filing is likely to stoke the debate in Washington over the Obama administration’s funding of alternative energy companies. In 2009, A123 got a $249 million Department of Energy grant to help it build U.S. factories. Republicans have accused Obama of wasting stimulus money on the companies after the failure of politically connected and now-bankrupt solar power company Solyndra LLC, which left taxpayers on the hook for $528 million.

While the bankruptcy filings do not include A123′s subsidiaries outside of the U.S., those assets also will be sold.

With reporting by the Associated Press and the WBUR Newsroom

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