Fisker files for bankruptcy, assets and debt assumed by Hybrid Technology Holdings

The high-end electric carmaker, which had received U.S. loans, will be restructured by Hybrid Technology Holdings, an investor group controlled by Hong Kong billionaire Richard Li.

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Fisker Automotive (Anaheim, Calif.), the dormant maker of hybrid electric sports cars, filed for Chapter 11 bankruptcy protection on Friday Nov. 22 as part of a restructuring plan, said an Autonews.com article published Nov. 27. Hybrid Technology Holdings LLC, an investor group controlled by Hong Kong billionaire Richard Li, is purchasing Fisker's assets and will provide $8 million in debtor-in-possession financing to fund the sale and restructuring. The Fisker Karma incorporated some composites in its body panels.

The U.S. Department of Energy (DOE) sold its green technology loan in Fisker to Hybrid Technology for $25 million. The investor group bought one loan extended by the U.S. Department of Energy, originally worth $168 million. In all, the DOE has recouped about $53 million on its $192 million investment in Fisker.

"After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders," Marc Beilinson, Fisker Automotive's chief restructuring officer, said in a statement. "We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership."

In a statement, Hybrid Technology said the purchase of the government loan was the first step toward eventually restarting production and sale of the Karma, which Fisker has not built in about 18 months, and the development of other hybrid electric vehicles.

"As we continue to examine Fisker's opportunities, we will be making decisions about the structure and footprint of the new business," a spokeswoman for Hybrid Technology, Caroline Langdale, said in a statement. Although the design of the Karma drew rave reviews, it had many quality problems that hurt the company's image and drained cash. In April, Fisker fired most of its staff to save cash following an unsuccessful search for a buyer. Its financial woes left Fisker unable to repay millions in outstanding bills to suppliers, the DOE and others. The DOE put the loan up for auction in midOctober.

Fisker originally won a $529 million line of credit in 2009 as part of the Obama administration's effort to boost advanced vehicle development in the United States. But the DOE froze Fisker's credit line in mid-2011 after the company missed certain performance targets. The Energy Department decided to auction its interest in Fisker, whose $103,000 Karma was driven by actor Leonardo DiCaprio and singer Justin Bieber, after the company defaulted on its loan without making a payment and attempts to find a buyer failed.

The Orange County Register and The Los Angeles Times, citing Rep. Marsha Blackburn, RTenn., and people familiar with the matter, reported Hybrid Technology is owned by Li.

Fisker was cofounded by and named after former Aston Martin designer Henrik Fisker, and backed by $1.2 billion in venture capital investments. It stopped making cars last year shortly after a Karma quit running during a Consumer Reports road test and failures in batteries supplied by A123 Systems Inc. led to a U.S. recall and A123's bankruptcy. Some of Fisker's remaining vehicles were destroyed by flooding during Hurricane Sandy after it ceased production, and its insurance company refused to pay for the damages. Henrik Fisker quit after about 75 percent of the company's employees were fired.

Hybrid Technology committed to following through with some kind of presence in the U.S., says a Nov. 27 Wall Street Journal by Mike Ramsey, a condition of the original loan to Fisker. The company owns a former General Motors Co. plant in Delaware that was to be used for building a new line of plug-in hybrid Fiskers until the company ran out of cash.

"HT is committed to building upon the Fisker legacy and presence in the United States as a foundation for the design and manufacture of advanced hybrid electric vehicles," said Langdale. "We will work to realize the full potential these fantastic cars offer in helping to remake the auto industry for the 21st Century."