China’s Wanxiang America Corporation successfully outbid Hybrid Tech Holdings, LLC in an auction for the assets of Fisker Automotive Inc., a bankrupt luxury hybrid automobile maker. As noted previously, prior to the auction, Delaware bankruptcy Judge Kevin Gross entered an order limiting Hydrid’s credit bid at the auction to $25 million, the price it paid to purchase $168 million worth of Fisker’s pre-bankruptcy secured debt.
The judge’s refusal to allow Hybrid to credit bid more than the purchase price of the debt set the stage for a highly competitive auction, which included nineteen rounds of bidding that added more than $90 million to starting offers for Fisker’s assets. Wanxiang’s winningbid included $126.2 million in cash and a 20% stake in the reorganized Fisker, worth an estimated $15 million. Wanxiang had already planned on purchasing a former General Motors assembly plant in Delaware where Fisker had been planning to produce cars.
Despite the successful auction, Fisker’s unsecured creditors may still find themselves out of the money as Hybrid will argue that it should be paid the full value of its $168 million secured claim, which claim amount exceeds Wanxiang’s purchase price.