Fisker Automotive Inc. has asked a bankruptcy judge to postpone the auction of A123 Systems Inc., a U.S.-based electric-car battery maker. Gregg Galardi, the attorney of the luxury hybrid automaker, has filed court papers in Wilmington, Del., to state that if the sales process is rushed, it will hurt the estates and deny creditors of value that may be encountered through higher and superior offers. He also said that Fisker will file an “emergency motion” to challenge the so-called debtor-in-possession loan. He declined to reveal details. Court papers indicate that Fisker is asking to extend the bid deadline, auction date and related dates and deadlines in the bidding procedures request by a minimum of 30 days.
A123, which was given a $249 million federal grant, said it will sell its automotive-business assets to Johnson Controls Inc. in a $125 million deal. The deal is subject to other potential offers in a bankruptcy auction. In Chapter 11 documents, A123 (which is based in Waltham, Mass.) posted assets of $459.8 million and debt of $376 million as of Aug. 31. According to court documents, A123 is scheduled to go back to court next week to get approval of what remains of a $72.5 million loan.
It intends to file court papers aiming to achieve interim approval of a replacement debtor-in-possession facility from Wanxiang America Corp. On Oct. 18, the company won interim court approval to borrow up to $15.5 million in DIP financing from Johnson Controls. The auto company said it isn’t contesting the need for an asset sale, only “various protections” for Johnson “that are unnecessary, excessive, and counterproductive to a successful sales process,” which include maybe a $7.75 million breakup fee and expense reimbursement.