In Re Fisker Automotive Holdings, Inc.

2014 WL 210593 (2014)

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Nature of the Case

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Facts

Fisker Automotive Holdings, Inc. (P) was founded in 2007 with the goal of designing, assembling, and manufacturing premium plug-in hybrid electric vehicles. P did not do well and was subject to safety recalls related to battery packs supplied by a third party vendor, the loss of a material portion of their existing unsold vehicle inventory in the United States during Hurricane Sandy in 2012, and the loss of their lending facility provided through the United States Department of Energy (DOE). P filed Chapter 11. P had approximately $203.2 million in indebtedness and related obligations outstanding. P owned DOE $168 million on a loan to fund an assembly and production site. On October 11, 2013, Hybrid (D) purchased DOE's position of outstanding principal of $168.5 million ($.15/$1.00) under the Senior Loan Facility for $25 million and, for all practicable purposes, succeeded to DOE's position as the Debtors' senior secured lender. P entered into discussions with D regarding D's potential acquisition through a credit bid of all or part of the Senior Loan. An Asset Purchase Agreement was made to acquire substantially all of the assets of P for consideration which includes $75 million in the form of a credit bid. P decided that the cost and delay arising from a competitive auction process or pursuing a potential transaction with an entity other than D would be reasonably unlikely to increase value for the estates. The Official Committee of Unsecured Creditors opposes D's right to credit bid. The Committee strongly endorsed Wanxiang's participation in an auction. The Committee claims that D is limited to a $25 million credit bid and that if not there could be no meaningful auction.