* Creditors back auction with China's Wanxiang as bidder
* Creditors seek permission to sue former Fisker directors
* Hearing on Friday may decide future of Fisker
By Tom Hals
Dec 31 China's largest auto parts company made a
surprise bid for Fisker Automotive just days before the bankrupt
maker of the Karma plug-in hybrid sports car was to be sold to a
Hong Kong tycoon, according to court documents.
Fisker creditors asked the U.S. Bankruptcy Court in
Wilmington, Delaware, to scrap Fisker's agreed sale to a company
affiliated with Richard Li and instead hold an open auction at
which auto parts supplier Wanxiang America Corp plans to bid.
Wanxiang has agreed to make an initial bid of $24.725
million and said it will assume some liabilities of Fisker,
according to documents filed at late Monday's deadline to object
to Fisker's plans.
A hearing has been scheduled for Friday in Wilmington to
consider whether Fisker should proceed with the sale to the Li
affiliate or adopt the creditors' proposal.
The U.S. Bankruptcy Court judge overseeing the case, Kevin
Gross, earlier this month raised concerns about Fisker's rush
through bankruptcy, which was filed only a month ago.
James Sprayregen, a Kirkland & Ellis attorney who represents
Fisker, did not immediately respond to a request for comment
left with his office.
Wanxiang outbid Johnson Controls last year in a bankruptcy
auction for most of the assets of A123 Systems Inc, which made
batteries for Fisker's cars.
"They are extremely capable and knowledgeable of the
industry and know how to get things done," said William Baldiga,
a Brown Rudnick attorney who represents Fisker's official
Both Fisker and A123 obtained green technology loans from
the U.S. Department of Energy. Critics of the government's loan
program tried to get regulators to block the sale of A123 to
Wanxiang, arguing that sensitive technology was being
transferred to an economic rival.
Baldiga said he does not anticipate similar problems with
the sale of Fisker's assets, which he said are primarily related
to automotive design.
Wanxiang plans to restart Fisker production as soon as April
and eventually move the manufacturing from Finland to Michigan,
according to Wanxiang's presentation to creditors that was filed
with the court.
The Chinese company estimated it would sell more than 1,000
Karma hybrids in the first 18 months in the United States and
500 in Europe. Fisker sold the Karma for more than $100,000
each. Wanxiang said in its presentation it could lower
production costs, but did not suggest a price tag.
Fisker filed for bankruptcy in November, about a year after
Fisker raised more than $1.4 billion in public and private
funds after its founding in 2007, but lavish spending, quality
and engineering blunders and other mistakes drained the
company's coffers and delayed the launch of its Karma plug-in
hybrid, several people close to the company told Reuters earlier
An entity affiliated with Li planned to buy the company
after he paid $25 million for Fisker's loan from the U.S.
government. The Li affiliate planned to buy Fisker's assets
using not cash but a "credit bid" of $168 million owed on that
loan, leaving other creditors such as suppliers with next to
The committee proposed an auction be held at the end of
January and asked the bankruptcy court to bar Li's affiliate
from credit bidding more than the $25 million it paid for the
In addition to seeking an auction of Fisker's assets, the
creditors' committee asked Gross, the Bankruptcy Court judge,
for permission to sue former Fisker directors Li and David
Manion, as well as Fisker co-founder Bernhard Koehler.
The committee alleges they steered the company away from a
proposed sale to Wanxiang earlier this year and toward the plan
to buy the government's loan. The creditors are seeking damages
of at least $25 million.
The creditors allegations follow a complaint filed Friday in
Delaware federal court by Atlas Capital Management LP that
accused the car maker's founder, Henrik Fisker, and others of
failing to disclose the company's shaky finances to investors.
The creditors' committee also sought to put the government
loan now held by Li's affiliate at the back of the line for
repayment because the scheme by Li and Manion had harmed other
"As a proximate result of Manion's breaches of fiduciary
duty as alleged, the valuable assets of Fisker have been or will
be stripped from the Debtors for the benefit of Manion, with a
minimum value of $25 million," said the committee complaint.
The case is In Re Fisker Automotive Holdings Inc, U.S.
Bankruptcy Court, District of Delaware, No. 13-13087