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Quick Sale In Fisker Bankruptcy Remains On Track

Wed, 12/11/2013 - 7:46am
Randall Chase, AP Business Writer

WILMINGTON, Delaware (AP) -- A judge gave preliminary approval Tuesday to failed electric-vehicle maker Fisker Automotive's description of its proposed bankruptcy plan, despite expressing concerns that the bankruptcy case was moving too rapidly.

Judge Kevin Gross granted interim approval of the disclosure statement describing Fisker's bankruptcy plan and the process for soliciting votes from creditors after attorneys for the official creditors committee assured him that they agree with the current case schedule.

Fisker, which had planned to build cars at a former General Motors plant in Delaware, filed for bankruptcy protection last month, ending a long, downward spiral that began after it received a $529 million loan commitment from the U.S. Department of Energy.

Hybrid Technology LLC, owned by Hong Kong billionaire Richard Li, is seeking to buy Fisker in bankruptcy after paying $25 million for DOE's outstanding loan, resulting in a loss to federal taxpayers of $139 million.

Fisker's plan calls for the transfer of substantially all of its assets to Hybrid in a private sale. Hybrid would use a $75 million credit bid based on the secured loan it holds to take ownership of Fisker. Hybrid, upon completion of the sale and consummation of the bankruptcy plan, also would waive $4 million in claims from its proposed role in providing financing to Fisker during the bankruptcy case.

A hearing to determine whether the court should approve the sale is scheduled for Jan. 3.

Meanwhile, attorneys for 157 former Fisker employees abruptly laid off in April are challenging the company's bankruptcy financing plan, which is the subject of a hearing Monday.

The former employees, who have filed a federal lawsuit in California over inadequate notice of the layoffs, argue that Fisker's bankruptcy financing agreement with Hybrid improperly infringes on the priority of their wage claims.

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