The Bankruptcy judge in Delaware did wonders for the unsecured creditors in holding an auction for the control of the bankrupt company Fisker. Judge Kevin Gross forced the auction over the objections of Hybrid Technology the firm that bought the secured US DOE loans with face value of $169 million for only $25 million. Hybrid thought they had $169 million of leverage but the judge ruled they only had leverage equal to amount they bought the loans, the $25 million.
Wanxiang could and did impute more value to Fisker as Wanxiang already owns Fisker’s once bankrupt battery supplier A 123. A 123 is another case where Obama’s DOE took a bath on a green energy loan. Wanxiang bid $149.2 million in cash and other considerations for Fisker and the judge will rule on Tuesday whether he approves his own handy work of getting significantly more for the unsecured creditors. The Judge did a great job handling the bankruptcy and this should be a case study in how to get the most money for those who were screwed by Fisker and its board of directors and management.
What is also a case study is how inept Mr. Obama, Dr. Moniz, and the DOE were in only getting $25 million for $169 million of secured loans we the tax payers paid for by giving Fisker (Al Gore et al) our money. The DOE should have got $149.2 million back not the paltry $25 million. The auction proved the market value of Fisker. The DOE had all the leverage as the secured lender but folded so bloody fast for next to nothing with a loss to taxpayers of $144 million. This is no different than Obama and his USDA secretary Vilsack selling hundreds of millions of pounds of sugar that cost taxpayers 21 cents a pound for less than 4 cents a pound to make “green” ethanol for fuel. The whole green story of the administration is one of incompetence and giveaway.
I actually think Wanxiang can resurrect Fisker and may still produce a car in the USA that is similar to the Chev Volt that sells for around $50,000. They have the patents to do this. When Leslie Stahl did her 60 Minutes piece on the clean-tech bust she interviewed the head of Wanxiang in the USA and I was impressed that he told her to stop asking nonsense about his Chinese company and that he was simply being a capitalist. It is amazing how he as a man who grew up under communism gets the profit motive while Obama who grew up under capitalism gets the loss motive. I guess it all depends on who is smart in business and who is not. Obama, Chu, Moniz, Vilsack the DOE, and the USDA should all be sent to China for some reeducation in economics 101. Perhaps Judge Judy is right about Obama's legacy that Beauty Fades Dumb is Foerever.