* Li's Hybrid Tech seeks quick appeal of cash bidding ruling
* Auction could be held as soon as Feb. 4
* Li's lawyers call ruling a "terrible precedent"
By Tom Hals
Jan 15 A Hong Kong businessman intensified his
fight for Fisker Automotive, the bankrupt maker of the plug-in
hybrid Karma sports car, seeking an immediate appeal of a ruling
that had opened the door for China's Wanxiang Group as a bidder.
The legal team of the businessman, Richard Li, filed an
emergency motion late Tuesday seeking permission for a
fast-track appeal of a ruling requiring some cash bidding, a day
after Li raised his bid for Fisker to $55 million.
Without cash bids, Wanxiang did not plan to join the
The auction could be held as soon as Feb. 4, according to
papers filed in the U.S. Bankruptcy Court in Wilmington,
Attorneys for the creditors committee and Wanxiang declined
to comment. Attorneys for Fisker did not immediately respond to
a request for comment.
Both sides have been sweetening their proposals for Fisker,
which ceased production in 2012 after a series of recalls of its
$100,000 luxury cars. Li has been a long-term investor in
Fisker, which burned through more than $1 billion. Wanxiang
acquired its battery supplier, A123 Systems Inc, in 2013.
Li had planned to buy Fisker's assets not with cash but by
forgiving some of what Fisker owes on a $168 million secured
loan, a process known as a "credit bid." Unsecured creditors
were likely to get next to nothing under the original plan.
Fisker's unsecured creditors responded by teaming up with
Wanxiang, China's largest auto parts company, to act as an
initial or "stalking horse" bidder in an auction. To promote a
competitive auction, creditors wanted to limit Li's credit
bidding to $25 million, which the bankruptcy court judge did on
That loan was originally extended by the U.S. government to
bolster the development of U.S. green vehicle technology. Li
bought the loan for $25 million at a government auction last
Li's legal team warned U.S. Bankruptcy Court Judge Kevin
Gross that by capping credit bidding he was making new law and
setting a "terrible precedent."
Li's legal team also said Gross's ruling "eviscerates"
rights of secured creditors and undermines the auction process
for government loans.
Gross said on Friday that his ruling should only applied to
the Fisker bankruptcy because of its unusual circumstances.
The judge has been skeptical from the outset of the
breakneck pace of the bankruptcy, which was filed in late
November. Court papers filed on Tuesday show little sign of a
The committee wants an auction on Feb. 4 and Fisker has
proposed an auction on Feb. 12, according to the court filings.
The case is In re Fisker Automotive Holdings Inc, U.S.
Bankruptcy Court for the District of Delaware, No. 13-13087.