Jan. 02--Creditors in the Fisker Automotive bankruptcy proposed an alternative plan to that of Hong Kong billionaire Richard Li, as the fast-tracked case took an unexpected turn this week.
Lawyers representing the creditors proposed a competitive auction in bankruptcy court backed by Wanxiang, the Chinese auto parts supplier. Wanxiang snapped up A123, Fisker's sole battery supplier, from bankruptcy court in January 2013.
The creditors, which include suppliers and employees in a class action lawsuit, also alleged that a Fisker director, David Manion, helped push the Anaheim-based company into Li's hands by "acting to cutoff...Fisker from alternative restructuring opportunities," according to documents filed in the case. In doing so he breached fiduciary duty to Fisker's other investors and creditors, a draft complaint filed in the case late Monday said.
The court had set Dec. 30 as a deadline for objections to the Li plan.
A call to Fisker's lawyers seeking comment on the allegations was not immediately returned.
"With another bidder coming in it opens up the bankruptcy process to a wider audience...that could provide a better outcome [for us]," said Sven Etzelsberger, one of the laid off employees, who is on the creditor's committee. "Seeing an option that might be more viable for the future of Fisker is always good."
Fisker hasn't made one of its $100,000-plus hybrid cars since 2012, but in 2013 the company left taxpayers footing a $139 million bill on a failed Department of Energy loan and more than 150 employees were laid off in April without required 60 days notice or pay. A handful of executives at the struggling company were each paid hundreds of thousands of dollars in pay and benefits in 2013 as it wound down operations.
The company entered the hands of Li in November, after the DOE auctioned to his holding company the roughly $170 million in debt it was owed for $25 million. Fisker simultaneously entered bankruptcy.
The allegations come the same week that investor Atlas Capital Management sued over $2 million in losses it says it suffered after Fisker failed to disclose problems with the DOE loan and a 2011 safety recall while the company was raising money, according to Bloomberg.
Fisker's only production vehicle, the eye-catching Karma, was assembled in Finland and features a large battery running between the seats down the center of the vehicle as well as a gas generator to charge up the battery for extended range. Only 2,700 Karmas were made and the car differs considerably from Palo Alto-based Tesla's fully electric Model S, which offers much more seating and storage space by forgoing the generator and laying a battery flat along the undercarriage of the vehicle.
Production defects in the Fisker battery produced in Michigan by A123 created a media disaster when the car shut down on Consumer Reports and led to a recall that cost A123 $55 million and ultimately helped to bankrupt that company.
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Original headline: A new entrant into Fisker bankruptcy
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