Wanxiang Group Cleared to Bid on Fisker Assets

A U.S. bankruptcy judge has rejected a plan for a fast-track sale of Fisker Automotive Inc. assets to a Hong Kong group led by billionaire Richard Li.

Instead, the judge favors an auction involving Li's Hybrid Technology Holding LLC and a unit of Chinese auto parts maker Wanxiang Group.

Fisker filed for Chapter 11 bankruptcy in November with a plan to be acquired by Hybrid Technology. Li planned a credit bid, in which he would forgive a portion of a $168 million secured federal loan he holds.

The judge acknowledges Li's right to make such a bid. But he agrees with a stipulation in Wanxiang's offer that the amount Li may use should be limited to the $25 million he paid for the loan.

Wanxiang is offering $36 million for Fisker's assets. Hybrid has bid $25 million says it will pay Fisker creditors another $1 million and let them share the proceeds of selling a former General Motors Co. auto plant Fisker bought in 2010 for $20 million.