The end of Fisker Automotive still isn’t final. A federal bankruptcy judge in Delaware today ruled an auction should determine the fate of the car maker.
The ruling will officially allow 2 Chinese companies, and anyone else interested, the ability to bid on the luxury car manufacturer’s assets.
U.S. Bankruptcy Judge Kevin Gross said an auction would allow the debtors to receive a “fair and reasonable” price for Fisker.
At least one company, Wanxiang America Corporation has expressed interest in bidding on the luxury car manufacturer. As part of it’s bid proposal, Wanxiang sweetened the deal by saying it would manufacturer the next generation of Fisker cars at the Boxwood Road plant in Newport, Delaware.
The news is a glimmer of hope for the state’s economy as it invested nearly $20 million in grants and loans to bring the car manufacturer to Delaware.
“On behalf of the people of Delaware, I want to thank the court for its decision,” said U.S. Sen. Tom Carper. “The loss of both of Delaware’s auto assembly plants within months of each other five years ago was gut-wrenching for me and many Delawareans. The judge’s decision does not ensure that the Boxwood Road plant will come back to life in a few years to produce breathtakingly beautiful, energy efficient automobiles. What it does mean, however, is that Wanxiang America, Inc., a Chinese company with strong financial resources, business operations in 14 states, and a deep interest in reopening the Boxwood Road plant, will now have a fighting chance to make that happen.”
Fisker had been speeding through the bankruptcy process with Hybrid Technologies as the first bidder. It is owned by Chinese billionaire Richard Li. The company had purchased the U.S. Department of Energy loan that Fisker had defaulted on and sent them into bankruptchy. However, attorneys representing the unsecured creditors committee, or those are owed money by Fisker, weren’t happy with the sale process and requested that an auction be held to see if they could recoup more money. One of those creditors is the state of Delaware.
Marc Bellison, chief restructuring officer of Fisker said they’re happy to move forward with the auction. “[We] look forward to a spirited and productive public auction of the assets and welcome all bidders,” said Bellison.
Sunni Beville, a partner with Brown and Rudnick, represents the unsecured creditors committee. She said the auction could mean more money for the thousands of creditors.
“I think it means recovery, it means hopefully more transparency as far as business plan and we’re hoping for and improved process,” she said.
A hearing is scheduled for Monday where Judge Gross will decide on the bidding procedures. Bidding could take place as early as February.