The United States Bankruptcy Court in Delaware has granted A123 Systems request for so called ‘first day’ enabling it to operate pending the recently announced sale of automotive assets to Johnson Controls.

The court granted A123 interim approval to use US$15.5m of its $72.5m debtor-in possession (DIP) financing from Johnson Controls to support the company’s operations throughout the transaction process. A court hearing for final approval of the DIP is scheduled for 30 October 2012. The company also received approval to, among other things, continue paying employee wages, salaries, benefits and other employee obligations.

While Johnson Controls will acquire A123’s automotive business assets, A123 said it was in talks regarding “strategic alternatives” for its grid, commercial, government and other operations, and “has received several indications of interest for these businesses”.

“To facilitate the transaction process, A123 and all of its US subsidiaries filed voluntary petitions for reorganisation under Chapter 11 of the US bankruptcy code in the US Bankruptcy Court for the District of Delaware. The company’s subsidiaries located outside the US were not included in the filings,” it said in a statement.