Fisker Automotive's assets go up for auction behind closed doors on Wednesday, as the fate of the former General Motors plant here hangs in the balance.
The Wilmington plant, valued at up to $50 million, is a major asset for the plug-in hybrid automaker. Fisker had been planning to build its cars at the plant, with the help of state and federal incentives. But after a series of setbacks, the company declared bankruptcy in November.
There are two known bidders: Hybrid Tech Holdings LLC, owned by Hong Kong businessman Richard Li; and Wanxiang America Inc., an arm of China's largest auto parts manufacturer. There remains the possibility others could join.
Both bidders have expressed some willingness to use the Delaware plant if market conditions permit.
Attendance at the auction in New York on Wednesday is limited to Fisker, the unsecured creditors' committee, Hybrid Tech, Wanxiang and any other bidder that has submitted a bid that meets the auction's criteria, and those parties' representatives, according to the bankruptcy court clerk's office.
According to bidding procedures, Fisker is required to file with the court a "notice of successful bidder" within one business day of the conclusion of the auction, the clerk's office reported.
The judge in the case, Kevin Gross, has scheduled a hearing in his courtroom for Friday morning, at which Fisker is expected to seek approval of the sale.
Ilene Slatko, principal of Delaware Shareholder Services, said the biggest questions to be answered are whether there are other possible buyers that have yet to emerge, and what price Fisker's assets will ultimately fetch. Slatko said she has seen auctions that have lasted for hours, as the parties go back and forth.
Initially, Fisker had filed for bankruptcy prepackaged with Hybrid Tech, but after Wanxiang indicated interest in a competing bid, Gross called for an auction. Hybrid Tech filed an appeal to void the auction, but a federal judge denied the appeal last week.
During a Jan. 13 hearing, a Fisker attorney, Ryan Dahl, expressed satisfaction that the bidding appeared to be improving the value for creditors. Those creditors include the Delaware Economic Development Authority, which invested $20 million in Fisker and was expected to get less than a penny on the dollar back under the initial bankruptcy plan rejected by Gross.
Fisker also owes about $1 million in property taxes to New Castle County and the Red Clay Consolidated School District.
Slatko said far more money is owed than what Fisker will come up with in the auction. The auction, she said, might fetch "incremental gains."
"I hope the citizens of Delaware get some compensation for having supported the idea, and been on the hook" through their tax payments, Slatko said.