The United States Bankruptcy Court for the District of Delaware has approved a plan by electric carmaker Coda Automotive to sell its assets for $25 million to a group of lenders led by Fortress Investment Group. The transaction entails payments of $1.7 million in cash, while the rest will be paid through a "credit bid," in which Fortress will bid for Coda’s assets using debt owed instead of cash.
In its bankruptcy petition filed on May 1, 2013, Coda said it is exiting the car business to concentrate on the development and sale of energy storage systems through subsidiary Coda Energy. In a statement, Coda said the court’s approval of the sale will allow it to emerge in a stronger position to develop its core technology, forge stronger relationships with partners, and allow it to execute its business plan in the “growing energy-storage sector."
Two Coda affiliates -- Lio Energy Systems Holdings and Miles Electric Vehicles – recently filed for chapter 11 bankruptcy protection and are seeking to have their cases jointly administered with those of Coda Holdings and its affiliates, including Coda Automotive.
The case is in re Coda Holdings Inc., Case No. 13-11153, U.S. Bankruptcy Court, District of Delaware. Coda sought bankruptcy protection after selling only 100 of its electric sedans. Coda rolled out its five-passenger electric car in California in 2012, with a range of 125 miles on a single charge. The $37,250 (EUR27,972) electric vehicle received criticisms for its no-frills styling. [source: Bloomberg]