In re Fisker Automotive Holdings, Inc.

Fisker Automotive Holdings, Inc. (Fisker) (debtor) was formed to design and manufacturer hybrid-electric cars. Among other financing, Fisker obtained a $168 million loan from the United States Department of Energy (DOE) to fund the establishment of an assembly and production site. Fisker suffered financial setbacks. Hybrid Tech Holdings, LLC (Hybrid) (creditor) purchased the DOE’s secured claim for $25,000,000 and took the DOE’s place as Fisker’s senior secured lender. Fisker filed for reorganization under chapter 11 of the bankruptcy code. Fisker entered into discussions to sell Fisker’s assets to Hybrid through an asset purchase agreement. Hybrid proposed to acquire the assets with a $75,000,000 credit bid. The committee of unsecured creditors (the unsecureds) objected to the proposed sale, sought an open auction, and endorsed Wanxiang American Corporation (Wanxiang) as an interested bidder. The unsecureds and Fisker argued that Hybrid’s right to credit bid should be limited to $25,000,000, which was the price Hybrid had paid for the claim. The unsecureds and Fisker claimed that Hybrid’s ability to credit bid above that amount precluded the possibility of a meaningful auction that could result in a higher price for Fisker’s assets. Wanxiang refused to take part in the auction unless the court limited Hybrid’s ability to credit bid. Fisker and the unsecureds petitioned the bankruptcy court to cap Hybrid’s credit bid at $25,000,000.