The dust is starting to settle for Coda Automotive as it wends its way through bankruptcy proceedings. While formal agreements needed to be submitted to the court for approval, the judge granted a request by the parties to sign final orders approving the failed electric carmaker's debtor financing and sale plans.

Coda's attorneys had met behind closed doors for several hours with creditors to resolve disputed issues. Attorneys for the US trustee and official creditors committee had argued in court papers that Coda's financing and sales plan was tipped in favor of a group of lenders led by an affiliate of Fortress Investment Group. They didn't like the lead, or "stalking horse," bid of $25 million that the Fortress affiliate had placed. The stalking horse is also called a "credit bid" where a lender uses owed debt to buy a company's assets rather than cash. Judge Christopher Sontchi had expressed concerns about the company's bankruptcy plans at a hearing earlier in May. Sontchi said the changes made the documents more reasonable.

The judge also allowed $1.5 million to be set aside pay expenses of the creditors committee and to provide an initial dividend to unsecured creditors. This makes unsecured creditors able to share in any proceeds from lawsuits that might be filed later in connection to the bankruptcy.

This is the first potentially "good" thing to happen to Coda in a while. The automaker had to deal with US Worker Adjustment Retraining Notification (WARN) Act proceedings. In addition, the bankruptcy court received a filing by the automaker to "conduct a voluntary recall of Coda Sedans to replace roof-mounted side curtain airbags." Another recall had taken place last August, when Coda recalled 78 of the 100 vehicles it sold due to improper installation of side-curtain airbags.


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    • 1 Second Ago
  • 10 Comments
      David Murray
      • 1 Year Ago
      I can't imagine this company has an assets that creditors would want. And who would possibly want to buy this company? I mean, what do they hope to do with it?
        Spec
        • 1 Year Ago
        @David Murray
        Yeah, the car is a bit of a clunker. The miles/KWH numbers are terrible.
      Spec
      • 1 Year Ago
      Anyone see that article about people associated with the company taking out big "loans" from the company before bankruptcy? Marco, you called it right . . . this outfit did indeed have crooks in it. It obviously wasn't a total sham . . . they did produce a car. But it definitely had a bunch of shady characters pulling unethical moves.
        imoore
        • 1 Year Ago
        @Spec
        Good work, Marco. Seriously, you should publish a book on this. I'd buy it and recommend it as preferred reading.
        Marco Polo
        • 1 Year Ago
        @Spec
        @ Spec, Thank you. Yeah, but it gives me no joy to be right ! I hate to see anything that brings the EV industry into disrepute. It's such a betrayal of all EV supporters. The stalking horse method of business advantage is borderline legal. It depends on how the debt was created. It's possible for a creditor to be in premeditated collusion with directors to convert 'created debt' to overwhelm other creditors, and gain the bankrupt entity's assets at a fraction of the cost. Once the entity has been purchased, and wound up, all claims and evidence of wrongdoing also cease to exist. In the case of Coda, the prize was clearly a DOE loan. A check of the directors (and associates) past business records, is a usually pretty good indication of what to expect in the future.
          Marco Polo
          • 1 Year Ago
          @Marco Polo
          @ carney373 I've written long detailed critiques of this company since it's inception. But just for you I will repeat some facts. Hank Paulson started his career as assistant to John Ehrlichman in from 1972 to 1973. (He was given immunity from prosecution in return for co-operation) . Later, Paulson earned $35 million a year at Goldman Sachs, inventing many of the ' funny money ' securities that eventually led to the CFC. As Treasury Secretary, Paulson issued cheerful statements and encouraged Americans to invest in securities he knew were going to fail. By the time he resigned from office, despite America experiencing the worst financial crisis since the great depression, ol' Hank's personal wealth had grown by hundreds of millions.! Oh, along the way he gave $12.6 billion in " Bail Out ", taxpayer funds to his old buddies at Goldman Sachs ! "Distinguished ?'' , I'm not sure that the millions of little folk who suffered, and are still suffering, would agree ! Let's see, who else is on the board ? Surprise ! Hank's ol' buddy from Goldman Sachs, Steven “Mac” Heller ! ( "Mac" survived the GFC better than millions of his fellow investors! ) Billionaire. But, let's not forget Lord (political life peerage) John Browne. Lord Browne was forced to resign from BP due to his admissions of perjury, in a gay sex trial. While at BP he ruthlessly cut costs from safety procedures. Creating, among other incidents, the Texas City Refinery explosion, and the Deepwater Horizon disaster. Browne is also a director of Riverstone Holdings, a private equity fund specialising in leveraged buyouts of companies focused on oil and gas exploration, midstream pipeline, stc. Lord Browne, also chairman of Britain's only shale gas driller Cuadrilla Resources! Then we come to the founding Chairman Miles Rubin, corporate raider, expert in corporate bankruptcy survival, .and not surprisingly, owner of a rival EV importer . Miles Electric vehicles imports very poor quality EV's from the FAW Group. FAW is a PRC state-owned automotive manufacturer, (sound familiar?). As Miles Rubin used to say in his early days as a corporate raider and asset stripper, "Vot conflict of interest, already !" The rest of the American backer's have equally 'colourful' pasts. On the PRC side of Coda is Harbin HF Automobile Industry Group Co Ltd (Hafei) and Tianjin Lishen. Haifei supply the Glider, based on a copy of an obsolete Mitsubishi model.( Neither Coda, nor Haifei, have ever commissioned an Italian design studio ! ) . Tianjin Lishen, supply the battery technology. Haifei is part of the CCP owned, "China Weaponry Equipment Corporation", notorious for it's espionage schools, illegal arms trading, "labour camps, and other humans rights atrocities. Tianjin Lishen, is owned by, China National Offshore Oil Corporation, infamous for dealing in Heroin , massive environmental and human rights abuses, etc. But hey, what's not to trust about these guys ?!
          carney373
          • 1 Year Ago
          @Marco Polo
          So - your theory is, a long lineup of investors, including distinguished people such as former US Treasury Secretary Hank Paulson, decided to put their names and reputations and hundreds of millions of dollars behind a conspiracy to deliberately fail in after getting loans from the taxpayers, anticipating zero blowback or problems as a result.
        carney373
        • 1 Year Ago
        @Spec
        How about providing a link instead of spreading unsupported gossip?
          Marcopolo
          • 1 Year Ago
          @carney373
          @ carney373 Don't be so lazy ! Do your own research if you don't believe me. A good place to start is the reason why the DOE rejected Coda's loan applications.
      Marcopolo
      • 1 Year Ago
      It's difficult to validate, but it's not an unreasonable suspicion that the client of Fortress Investment Group, with the $25 million in debt equity, would be an associate of Miles Rubin.