A U.S. bankruptcy court judge on Tuesday approved the sale of most of busmaker DesignLines assets to a California investor who said he plans to reopen the companys Charlotte operations.
An attorney representing DesignLine, which filed for bankruptcy protection in August, told U.S. Bankruptcy Judge Craig Whitley that Wonderland Investment Groups $1.6 million bid for equipment, machinery, intellectual property and other assets was the highest and best offer, eclipsing bids from five other groups.
DesignLine, which moved to Charlotte in 2006 from New Zealand, filed for bankruptcy after an investor expected to provide necessary financing pulled out in July. In the filing, the company listed assets of $14 million and debts of $37.5 million.
The busmaker featured several high-profile Charlotte investors and once employed former Charlotte Mayor Anthony Foxx, who became the U.S. transportation secretary in July. It had more than 250 employees, but it has laid off most of its workers, who built hybrid and electric buses at facilities off Westinghouse Boulevard.
Tony Luo, Wonderlands president, said he plans to invest $30 million in DesignLine and reopen operations in as soon as a month. First, though, he said he will need to negotiate contracts with bus operators in New Jersey, Denver and Montreal, which previously had contracts with the busmaker.
Luo said he plans to bring back key employees but the total number would depend on the companys contracts. The sale is expected to close Nov. 8.
I want to grow DesignLine and the economy here, Luo said in an interview after the hearing in federal bankruptcy court in Charlotte.
Luo, who lives in Pasadena, said he has been a distributor of microturbines used in hybrid systems for a decade. He has been long familiar with DesignLine and its products, he added.
Wonderland is a new company, Luo said. According to California Secretary of State records, a company called Wonderland Investment Group was incorporated in July.
DesignLines creditor committee initially objected to the sale, saying it provided no benefit to the companys unsecured creditors. But an attorney representing the committee withdrew the objection at the hearing after Whitley agreed to set a hearing to consider a motion to name a Chapter 11 trustee to oversee the case.
Prominent Charlotte businessman and DesignLine investor Cameron Harris is a member of the creditor committee. He has an $846,000 claim against the company.
The money from the sale will mostly be used to pay back the lender that provided financing to the company during bankruptcy, said Terri Gardner, an attorney representing DesignLine. There is no money to pay back investors, she said.
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