A US judge rejected a planned sale of Fisker Automotive Inc. to Hong Kong businessman Richard Li in favor of competitive bidding. This has opened the way for China's largest auto parts company to bid for the maker of the Karma plug-in hybrid sports car.
According to Reuters, Judge Kevin Gross of the US Bankruptcy Court in Wilmington, Delaware on Friday ruled that a competitive bidding between Li's Hybrid Tech Holdings LLC and a unit of auto parts maker Wanxiang Group Corp. was the best way forward in Fisker's bankruptcy.
Li was planning to "credit bid" or forgive a portion of what Fisker owes on a $168 million secured loan that he holds. Under the plan, other creditors were likely to get next to nothing. Li bought the loan for $25 million from the US government at an auction in October, the report said.
Fisker's unsecured creditors objected to the hybrid automaker's plan to sell itself to Li and teamed up with Wanxiang. Wanxiang has said it plans to start the cash bidding at $35 million. The unsecured creditors said the Wanxiang plan could fetch more than 40 cents for every dollar they are owed, Reuters said.
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