By Tom Hals
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 auction.
The auction could be held as soon as Feb. 4, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Delaware.
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 burnt 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 Friday.
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 year.
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 slowdown.
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.
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