The $25 million deal that would hand Hong Kong billionaire Richard Li control of bankrupt Fisker Automotive includes his agreement to move production of any new cars to the United States, according to staff members of the U.S. House of Representatives Energy and Commerce Committee, who were briefed on it.
It is unclear where production would take place. Hybrid Technology, Li’s holding company, did not respond to a request for an interview.
A U.S. Bankruptcy Court judge in Wilmington, Del., approved a process that could result in a sale of the company as early as Jan. 3, according to Bloomberg News.
As recently as last month, more than 20 parties expressed interest in buying a controlling interest in the maker of the sleek $100,000-plus hybrid electric automobile, according to documents filed over the weekend with the bankruptcy court. But after looking at the Anaheim company’s finances, only a handful bid on the U.S. Department of Energy’s loan.
Li emerged Friday as the winner of that loan and, in effect, got control of the company.
Taxpayers ultimately lost $139 million on the total $192 million lent to the company through the Department of Energy.
The bankruptcy filings include a 669-page document of creditors featuring hundreds of people with whom the company had dealings. It is unclear in most cases whether those were investors, vendors, car buyers who had warranties, or people who had some other relationship with the company. Most have redacted addresses and contact information, making it difficult to identify them.
Nonetheless, some of the names on the list indicate how well-connected the company was to Hollywood, Silicon Valley and Washington, D.C. The many Chinese, Arab and European surnames on the list also give a hint as to the carmaker’s global appeal.
Among the names:
• Robert Hunter Biden, who may be Vice President Joe Biden’s son of the same name. A call to his employer received a “no comment.”
• Leonardo DiCaprio, the actor, who was an investor and the first person to buy the car.
• Al Gore Jr., the former vice president, and John Doerr, partners at Kleiner Perkins, an early venture capital backer.
Joe Biden championed Fisker’s bid to produce its second car, the Atlantic, at a shuttered General Motors plant in Delaware, where the vice president was a senator for more than three decades. Fisker bought 142 acres in Wilmington for $21 million in 2010 and received millions in loans and grants from local agencies to start up production there. The plan never got off the ground.
Fisker’s first and only production car, the Karma, was produced in Finland and went on sale in 2011, two years later than planned.
The DOE suspended funding in 2011. The $192 million was from a much larger pool originally promised to Fisker. The majority of the funds were to go toward production of the second vehicle. It wasn’t until 2012 that the funding halt was made public; in the meantime, Fisker raised another $500 million in private money. All told, it received $1.2 billion in private funds.
The DOE financing required Fisker to sell 11,000 cars by February 2012, according to the court documents. Only 2,700 had been made before assembly stopped in the middle of that year, and 1,800 of those were sold.
Fisker changed its top management and the company suffered a string of disasters, including car fires and recalls. The car’s designer, Henrik Fisker, left in March this year.
Among other problems, late last year 338 Karmas, the entire U.S. inventory at the time, were destroyed by flooding in New Jersey from Hurricane Sandy. That leaves 562 cars unaccounted for. Valmet, the company assembling the Karma in Finland, holds “inventory and has asserted its right to liquidate this inventory to satisfy claims,” according to the documents.
In its filing, Fisker blamed its inability to achieve sales and production goals on “negative press, lingering effects of the global financial recession, unforeseen business disruptions, and liquidity shortfalls, among other factors.”
The company was left with less than $100,000 in cash in the spring of this year, about the same time Fisker laid off 160 of its remaining 219 employees. On Tuesday, former employees joined the bankruptcy case alleging they are owed nearly $3.8 million in unpaid wages and benefits.
Fisker survived in hibernation, its headquarters locked, on week-to-week injections from an unnamed party.
One of its largest creditors is BMW, which is listed by Fisker as having a $74 million claim in contract damages. The German company was to provide the engine for Fisker’s second model. The Karma is a plug-in electric vehicle with a gas generator to charge the battery for extra range.
Register staff writers David Hood and Mary Ann Milbourn contributed to this report.
Correction: An earlier version of this article had the incorrect time frame for Henrik Fisker leaving his company. It is now correct.
Contact the writer: 949-229-2426 or ihamilton@ocregister.com
