Fisker sale may be approved Jan. 3, bankruptcy judge says
Former suppliers to Fisker, many of whom are overseas, are concerned that the company's bankruptcy case may proceed so quickly that potential lawsuits may be eliminated without considering how much they could raise to pay creditors.
WILMINGTON, Del. (Bloomberg) -- Fisker Automotive Inc., the hybrid-car maker that failed after losing a U.S. government loan, may be sold by Jan. 3 under a schedule approved by the judge overseeing its bankruptcy case.
U.S. Bankruptcy Judge Kevin Gross on Tuesday approved a faster-than-normal sale process for the company, which filed for bankruptcy on Nov. 22 in Wilmington, Del.
Under Chapter 11 of the U.S. Bankruptcy Code, companies are usually required to try to organize an auction before selling assets.
"It is unusual to have, obviously, a sale without bidding procedures" and an auction, Gross said.
Fisker justified the fast pace of the case by claiming the company and federal officials conducted an "extensive" marketing effort before the bankruptcy was filed, according to court papers.
In October, the U.S. Department of Energy held an auction for a $168.5 million loan it made to Fisker.
An affiliate of Hybrid Tech Holdings LLC won that auction.
At the Jan. 3 hearing, Fisker will ask Gross to allow Hybrid Tech to exchange the debt it is owed for Fisker's assets.
Fisker also will seek approval for its liquidation plan, which may eliminate potential creditor lawsuits.
Former suppliers to Fisker, many of whom are overseas, are concerned that the case may proceed so quickly that potential lawsuits may be eliminated without considering how much they could raise to pay creditors, William Baldiga, an attorney with Brown Rudnick LLP, said in court.
For the sale to succeed, the liquidation plan and the sale should go forward at the same time, Fisker attorney Ryan Preston Dahl told Gross on Tuesday.
The judge agreed to hold a hearing Dec. 10 to decide whether a disclosure statement has enough information for creditors to decide whether to oppose the liquidation plan.
The Anaheim, California-based company listed assets of as much as $500 million and debt of as much as $1 billion in its Chapter 11 petition.
Assets include a shuttered General Motors factory in Wilmington that Fisker had planned to reopen.
Safety recalls, a battery supplier that went bankrupt and shipments lost to Hurricane Sandy all contributed to Fisker's financial woes, the company said in court papers.
A House Oversight and Government Reform subcommittee scrutinized a $529 million federal loan granted to Fisker in 2009, questioning why the government had made it in the first place and what the company would do to repay taxpayers.
Fisker missed its first payment on the low-interest U.S. loan on April 22. It had drawn about $193 million of the loan before being cut off by the Energy Department for missing milestones.
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