Company Faces Second Class Action Suit

A123 Systems, Inc., with operations in Westborough, is facing a class-action lawsuit by investors who feel they were misled about problems at a Livonia, Michigan plant that manufactures battery parts for the company.

At issue are reports of defective prismatic cells. A123 Systems reported that it will spend $55 million to replace products that may contain the defective cells.

“A123 has begun building replacement modules and packs and expects to begin shipping them to impacted customers this week,” the company reported in a March 26 statement. The statement said the expense will be funded over the next several quarters.

“We believe this is not a safety issue, and we have determined the root cause and have taken corrective actions,” said David Vieau, CEO of A123 Systems.

According to the Worcester Business Journal, the recent lawsuit is being brought by the law offices of Howard G. Smith, a Pennsylvania lawfirm that specializes in securities fraud. A similar suit was filed last week by an Oklahoma City law firm, the publication reports.

A123 Systems is a developer and manufacturer of advanced lithium ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company, headquartered in Waltham, expanded into Westborough in 2010. It holds a 10-year lease for 67,000 square feet of space at 155 Flanders Rd.

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