Fisker Bankruptcy: Obama Administration's $192 Million Loan Could Be Wasted, Creditors Worried
Fisker Automotive will attend a bankruptcy hearing on Jan. 3 in which a Delaware judge will decide whether or not to proceed with the company's sale.
The Anaheim, Calif. Based car maker recently filed for bankruptcy protection after receiving a $529 million loan commitment from the U.S. Department of Energy.
Fisker had secured $192 million from the Obama administration's green-energy loan program before having its funding cut off in 2011 after failing to meet agreed upon benchmarks.
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Taxpayers will be forced to cover $139 million with Delaware taxpayers shelling out $20 million in loans and grants provided to Fisker in a final attempt to keep vehicle production continuing at the GM plant in Wilmington.
Still all is not lost as the Energy Department was able to recoup roughly $28 million and sold the remaining portion of its loan to Hybrid Technology LLC for $25 million.
Hybrid is owned by Hong Kong billionaire Richard Li and is using a $75 million credit bid. The credit available to the Chinese company is due to the company being Fisker's senior secured lender.
"We believe we have a buyer who has a vested interest in this company, who has stood by this company when nobody else would," Fisker attorney Ryan Preston Dahl told U.S. Bankruptcy Judge Kevin Gross.
However, other unsecured creditors are expressing concern over the pace of the bankruptcy proceedings given that collectively they are owed roughly $250 million, but they could end up getting a mere $500,000 in cash.
The judge advised all parties involved to consider the brevity of the situation while insisting that a committee of unsecured creditors had not even ben formed yet.
"If we rush this, we're all going to be sorry," said Gross, despite scheduling the hearing for just over a month from now.
