WILMINGTON, Del. (AP) — A Delaware bankruptcy judge on Friday ordered a competitive auction for the assets of Fisker Automotive, rejecting a proposal by a group led by Hong Kong billionaire Richard Li to assume control of the failed electric auto manufacturer in a private sale.
U.S. Bankruptcy Judge Kevin Gross refused to accept Hybrid Technology LLC's plan to use $75 million it said it is owed as Fisker's senior secured lender as a credit bid for Fisker's assets. Agreeing with Fisker's official creditors committee that a competitive auction was the best way to maximize recoveries for Fisker creditors, Gross capped Hybrid's credit bid at $25 million.
Chinese auto parts conglomerate Wanxiang Group Corp. had offered an alternative cash bid of $35.7 million as the starting point for a competitive auction, contingent on Hybrid's credit bid being eliminated or capped.
Pin Ni, president of Chicago-based Wanxiang America Corp., had no immediate comment on the judge's ruling, saying he needed to talk to attorneys.
Caroline Langdale, a spokeswoman for Hybrid, said in an email that the company was "deeply disappointed" by Friday's ruling.
"Despite the court's decision, Hybrid will participate in the auction, as we still feel Hybrid represents the most competitive and viable bid for Fisker's future," Langdale said.
Anaheim, Calif.-based Fisker, which had planned to build cars at a former General Motors plant in Delaware, filed for bankruptcy protection in November. The move culminated a long downward spiral that began after Fisker received a $529 million loan commitment from the U.S. Department of Energy.
Hybrid recently paid $25 million for DOE's outstanding loan balance of more than $160 million, which resulted in a loss to U.S. taxpayers of $139 million. It then moved to take control of Fisker using a $75 million credit bid based on what it claimed it was owed as the company's new senior secured lender.
Hybrid also offered about $2 million in cash to go along with its credit bid and agreed to waive millions in fees it would be due for serving as Fisker's lender during the bankruptcy case. But it did not want to buy the former GM site in Wilmington and indicated that it had no interest in building cars in Delaware.
Wanxiang, on the other hand, filed court papers this week saying it would continue development and design of a second-generation line of Fisker vehicles, and that once such vehicles were ready for mass production "in volumes that necessitate a separate manufacturing facility," it would manufacture them at the now-shuttered GM plant. Wanxiang had indicated in earlier court documents that it wanted to resume production of Fisker's problem-plagued first-generation car, the Karma, in Finland and eventually shift production to a Michigan facility.
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