DETROIT (Reuters) -- U.S electric car maker Coda Automotive has won bankruptcy court approval to sell its assets for $25 million to a group of lenders led by Fortress Investment Group.
Under the deal, Fortress group will pay $1.7 million in cash, and the remainder will come by way of a "credit bid," in which Fortress will bid for the assets of Coda using debt owed instead of cash.
Coda said in its May 1 bankruptcy petition that it is exiting the car business to focus on the development and sale of energy storage systems through its subsidiary Coda Energy.
"[The ruling] will allow us to emerge in a stronger position to develop our core technology, forge stronger relationships with our partners, and ultimately, enable us to execute our business plan in the growing energy-storage sector," the company said in a statement.
Earlier on Tuesday, two affiliates of Coda Automotive -- Lio Energy Systems Holdings and Miles Electric Vehicles -- filed for Chapter 11 bankruptcy protection and are seeking to have their cases jointly administered with those of parent Coda Holdings and its affiliates, including Coda Automotive.
Coda filed for bankruptcy protection after selling just 100 of its electric sedans, another example of battery-powered vehicles' failure to break into the mass market.
Under Phil Murtaugh, former chief of General Motors' China unit, Coda launched its five-passenger electric car in California a year ago, delivering a range of 125 miles on a single charge. The $37,250 vehicle was criticized for its no-frills styling, and its short history also included a recall due to faulty airbags.