Richard Li

Fisker asks US court to shut out mainland suitor and approve its sale to Richard Li instead

Bankrupt US maker of 'green' cars goes to court to get sale to Richard Li approved

PUBLISHED : Friday, 03 January, 2014, 1:42pm
UPDATED : Saturday, 04 January, 2014, 2:08am

Fisker Automotive, the bankrupt maker of a plug-in hybrid sports car, asked a US federal judge to approve its proposed sale to Hong Kong businessman Richard Li Tzar-kai rather than a mainland Chinese suitor that Fisker alleged was to blame for its failure.

A courtroom showdown is set for January 10 that will determine the future of the defunct carmaker, which was launched with a controversial US government loan.

US Bankruptcy Court Judge Kevin Gross must decide if Fisker's business will be put to open auction or sold to an affiliate of Li as the company has proposed.

The hearing was originally scheduled for yesterday, but was postponed by one week as a major snowstorm threatened to disrupt travel throughout the eastern United States.

The company's plans were thrown into doubt on Monday, when the official creditors' committee proposed auctioning the business and presented an initial US$24.7 million bid from the US unit of Wanxiang, China's top automotive parts company.

Fisker attacked the creditors' proposal in a series of court filings on Wednesday with the bankruptcy court noting that after Wanxiang bought A123 Systems, a battery maker, it cut supplies to Fisker.

Wanxiang now seeks to profit from a bankruptcy that it helped cause

"Wanxiang now seeks to profit from a bankruptcy that it helped cause," Fisker said in a filing.

A lawyer for the creditors' committee disputed that, noting that Wanxiang acquired A123 months after Fisker idled its production to save cash. "Fisker was no longer producing cars at that time," said Sunni Beville.

The creditors' committee has called the Wanxiang bid proposal the best option. It also asked the bankruptcy court to allow it to sue former Fisker director David Manion and others for improperly pushing the sale to Li.

Hanging in the balance are the assets of a firm once touted as America's "green" rival to prestigious brands such as Maserati, but that has not made its signature Karma vehicle in more than a year.

The firm obtained a US$529 million loan from the US Department of Energy that was meant to promote fuel-efficient cars and helped lure private backing.

Fisker raised more than US$1.4 billion in public and private funds. But lavish spending, quality and engineering blunders and other mistakes drained the company's coffers and delayed the launch of the Karma, said sources close to the company.