US judge rejects Richard Li's Fisker bid, allows China's Wanxiang to bid
Decision means car-parts maker Wanxiang can bid for hybrid-car producer
A US judge rejected a planned sale of Fisker Automotive to Hong Kong businessman Richard Li Tzar-kai in favour of competitive bidding. The decision opens the way for China's largest car-parts company to bid for the maker of the Karma plug-in hybrid sports car.
US bankruptcy judge Kevin Gross said competitive bidding between a company affiliated with Li and a unit of car-parts maker Wanxiang was the best way forward.
"I think that, for me, at the end of the case, whether or not the price paid was fair or reasonable, I think an auction will provide that mechanism. That is the most favoured method," Gross said.
He scheduled a hearing tomorrow to decide how to proceed with an auction.
Gross made the ruling at a hearing in the US bankruptcy court in Wilmington, Delaware, that was held to determine how to proceed with Fisker's bankruptcy.
Fisker filed for bankruptcy in November with a plan to forgo the typical route in Chapter 11 procedure of putting the business on the auction block.
Li was planning to "credit bid", or forgive a portion of what Fisker owed on a US$168 million secured loan that he holds. Under the plan, other creditors were likely to get next to nothing.