Government, creditors object in CODA bankruptcy

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Associated Press

Posted on May 24, 2013 at 2:02 PM

Updated Friday, May 24 at 3:01 PM

DOVER, Del. (AP) — Attorneys for the federal government and unsecured creditors have filed objections to electric car maker CODA Holdings' bankruptcy plans.

Court papers filed Friday argue that CODA's bankruptcy financing and sale plans unfairly benefit a group of debtors seeking to acquire the company.

Lenders led by a Fortress Investment Group affiliate are proposing a credit bid of $25 million to take over the company. In a credit bid, a lender uses debt it is owed to buy a company's assets, rather than cash.

Other objections filed Friday involve concerns about obligations of the new owners to adhere to federal environmental and vehicle safety laws, and proposed bonuses for top executives and directors at Los Angeles-based CODA.

A hearing in the case is scheduled Wednesday in Wilmington, Del.

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