A Chinese auto parts maker and a Hong Kong businessman will square off in an auction for Fisker Automotive, the defunct maker of a plug-in hybrid sports car, a U.S. Bankruptcy Court judge ruled on Friday.
The Feb. 12 auction will pit the U.S. unit of China's Wanxiang Group against Hybrid Tech Holdings, a company affiliated with investor Richard Li of Hong Kong. Hybrid has said its initial bid would be worth $55 million.
Fisker's committee of unsecured creditors has said it hopes to find other potential buyers by the Feb. 7 bid deadline.
U.S. Bankruptcy Judge Kevin Gross of Wilmington, Delaware, said at a Friday hearing that attendance at the auction would be limited to the bidders, Fisker and a representative of the unsecured creditors committee. The auction will take place at the law offices of Kirkland & Ellis in New York.
Li's legal team is pursuing an appeal of Gross's order last week that will require bids to include some cash.
Li had planned to buy Fisker's assets by forgiving some of what the company owes on a $168 million secured loan, a process known as a "credit bid." Unsecured creditors were likely to get next to nothing under that plan.
The U.S. government originally extended that loan to bolster the development of green vehicle technology. Li bought the loan for $25 million at a government auction last year, and Gross limited his credit bid to that amount.
Li's lawyer called the ruling a "terrible precedent," but Gross defended the decision again on Friday.
"Sometimes I'm right, and sometimes I'm wrong, and I think I'm right on this," Gross said. "It was argued I was setting new precedent. I think I'm really following the law."
He said he would issue a written opinion of his credit bid decision later on Friday.
Fisker ceased production in 2012 after a series of recalls of its $100,000 luxury cars and filed for bankruptcy in November.
Li has been a long-term investor in Fisker, which burned through more than $1 billion. Wanxiang acquired Fisker's battery supplier, A123 Systems Inc, in 2013.
The case is In re Fisker Automotive Holdings Inc, U.S. Bankruptcy Court for the District of Delaware, No. 13-13087.