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WILMINGTON, Del. – A Delaware bankruptcy judge Friday ordered a competitive auction for the assets of Fisker Automotive, rejecting a proposal by a group led by Hong Kong billionaire Richard Li to assume control of the failed electric auto manufacturer in a private sale.

U.S. Bankruptcy Judge Kevin Gross refused to accept Hybrid Technology LLC’s plan to use $75 million it said it is owed as Fisker’s senior secured lender as a credit bid for Fisker’s assets. Agreeing with Fisker’s official creditors committee that a competitive auction was the best way to maximize recoveries for Fisker creditors, Gross capped Hybrid’s credit bid at $25 million.

Chinese auto parts conglomerate Wanxiang Group Corp. had offered an alternative cash bid of $35.7 million as the starting point for a competitive auction, contingent on Hybrid’s credit bid being eliminated or capped. It’s unclear whether Hybrid plans to participate in an auction.

California-based Fisker, which had planned to build cars at a former General Motors plant in Delaware, filed for bankruptcy protection in November. The move culminated a long downward spiral that began after Fisker received a $529 million loan commitment from the U.S. Department of Energy.

Hybrid recently paid $25 million for DOE’s outstanding loan balance of more than $160 million, which resulted in a loss to U.S. taxpayers of $139 million. It then moved to take control of Fisker using a $75 million credit bid based on what it claimed it was owed as the company’s new senior secured lender.