Advertisement

Bankruptcy Judge Orders Remains Of Fisker Auto To Be Auctioned


2009 Fisker Karma prototype

2009 Fisker Karma prototype

Enlarge Photo

After a court hearing on Friday, the fate of Fisker Automotive is even more up in the air, and as uncertain as ever.

U.S. Bankruptcy Judge Kevin Gross ordered a competitive auction of Fisker's assets, according to the Associated Press, after a last-minute bid by Chinese auto-parts conglomerate Wanxiang.

Gross rejected investor Hong Kong-based Richard Li's $25 million bid for the company, which Fisker itself wanted the court to approve.

MORE: Who's Still Buying Brand-New Fisker Karmas, And Why?

Those funds from Li's investor group--Hybrid Technology Holdings--would have gone directly to the U.S. Department of Energy to pay off a portion of Fisker's outstanding $168 million low-interest loan.

Hybrid then planned to take control of Fisker using a $75 million credit bid based on what it claimed it was owed as Fisker's senior secured lender during the automaker's ongoing bankruptcy.

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

The group has also offered an additional $2 million in cash, and to waive fees it claims it would be owed as Fisker's lender.

However, Hybrid has shown no interest in building cars at the former General Motors Boxwood Road plant near Wilmington, Delaware that Fisker had secured.

The News Journal reports that the investor group had considered selling the plant to pay off creditors.

Wanxiang's plans

In court papers, Wanxiang indicated that it would continue development of second-generation Fisker models--such as the smaller Atlantic sedan--resume production of the Karma at Valmet Automotive in Finland, and eventually build Fiskers in Delaware.

Fisker's creditors initially supported the $24.75 million bid from Wanxiang, which now owns A123 Systems, Fisker's battery supplier.

2009 Fisker Karma Sunset convertible concept

2009 Fisker Karma Sunset convertible concept

Enlarge Photo

Fisker has claimed that Wanxiang is partly responsible for the bankruptcy, alleging that the Chinese carmaker prolonged the shutdown of Karma production by cutting off the supply of batteries.

Prior to Judge Gross' decision, the creditors committee proposed that the bankruptcy court auction off the remains of Fisker rather than approve Li's bid, which it said had been accepted too quickly.

An auction of Fisker's assets is also supported by Delaware Congressman John Carney and Senator Tom Carper, who are encouraged by Wanxiang's interest in re-opening the Boxwood Road plant.

In a joint statement, they said an opening bidding process could attract a buyer interested in producing cars in large volumes, enough to require the capacity of the idled plant.

Bidding war continues

A public auction could become a re-play of the original contest for Fisker's DOE loan debt.

Wanxiang submitted a bid in that first round--partnering with former General Motors executive Bob Lutz--but lost out to Li's Hybrid Technology Holdings.

Lutz's VL Automotive plans to build a V-8-powered Karma called the Destino. It will unveil a Destino convertible at the 2014 Detroit Auto Show on Tuesday.

_______________________________________________

Follow GreenCarReports on Facebook, Twitter, and Google+.

Advertisement
 
Follow Us

Advertisement

Find Green Cars

Go!
Advertisement

Advertisement

 
© 2014 Green Car Reports. All Rights Reserved. Green Car Reports is published by High Gear Media. Send us feedback. Stock photography by izmo, Inc.