NEW YORK ( The Deal) -- A bankruptcy judge has rejected Fisker Automotive Holdings' sale motion in favor of an auction process proposed by unsecured creditors of the electric vehicle maker.
According to a Monday notice, Chief Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware in Wilmington on Jan. 10 rejected "certain terms" in connection with Fisker's proposed $79.73 million private sale of its assets to Hybrid Tech Holdings.
An order had not been entered as of Monday, but the notice indicated the sale hearing would resume Monday afternoon. Court minutes from Monday's hearing show Gross ordered parties in the case to auction, with a cap of $25 million on credit-bidding.
Parties are negotiating orders resolving the debtor's motion for final approval of its postpetition loan from Hybrid, its request for confirmation of its liquidation plan and the motion from the official committee of unsecured creditors for a rival sale process and replacement debtor-in-possession financing.Court papers did not indicate whether Hybrid would lead bidding at auction or if the stalking horse would be Wanxiang America, the lead bidder proposed by the creditors' committee. Hybrid earlier on Monday submitted a revised asset purchase agreement conforming with Gross' bench ruling on Jan. 10, although the company asserted the decision was "erroneous" and said it would promptly appeal the decision or take other action. Hybrid's proposed stalking-horse offer includes a credit bid of $25 million, $30 million in cash, the assumption of certain liabilities, $1.85 million in contributions and the modification of its DIP financing to remove a lien on certain causes of action on the effective date of a Chapter 11 plan. Hybrid also said it would give unsecured creditors at least $5.5 million of the purchase price if the creditors' committee supported Hybrid's bid to be stalking horse before the debtor made its decision on a lead bidder. Hybrid did not request a breakup fee or expense reimbursement in connection with the revised APA. The company spent $25 million to acquire a Fisker loan at auction from the U.S. Department of Energy on Nov. 22.