EV maker Fisker secured a deal with creditors to liquidate its assets to provide ongoing assistance to current vehicle owners while working out a Chapter 11 bankruptcy plan.
Fisker didn’t even own an assembly plant. It contracted production of the Ocean to Magna Steyr in Austria.
The company produced one vehicle line, the Ocean SUV. The vehicle has already been subject to multiple safety recalls and other quality complaints.
Fisker Inc. filed for Chapter 11 bankruptcy protection in June but has been negotiating with creditors and a group of owners to develop a plan that would satisfy all involved. The National Highway Traffic Safety Administration also expressed interest in ensuring Ocean owners get the assistance needed to ensure the vehicles are safe.
“The owners strongly believe that Fisker owes them a responsibility to ensure that their vehicles are safe and operable, and that the best way for Fisker to fulfill that promise is through a Chapter 11 process,” said attorney Daniel Shamah, who represents the Fisker owners. “We can be sure that employees and the advisers who are helping the company do this remain on board.”
Next stage
Fisker officials will continue to provide assistance to Ocean owners.
The new plan, which was finalized last Friday in U.S. Bankruptcy Court in Delaware, allows the company to liquidate some assets to remain in operation to help existing owners with recalls and other repairs.
Fisker executives will oversee the operations while the company winds down. This ensures owners get the help they need with vehicles. However, they must also submit a Chapter 11 plan by Oct. 9 to U.S. Bankruptcy Judge Thomas Horan.
This result came after a group of creditors pushed to move the Chapter 11 to a Chapter 7 filing after the company sold its remaining vehicles for $46 million. CVI Investments argued there was no business left to reorganize and was using too much cash — leaving too little for creditors.
More Fisker Stories
- Fisker Talks with Nissan Collapse; Bankruptcy Looms
- You Could Buy Henrik Fisker’s House for Less than his Car Company
- Consumer Reports Reviews Calls Fisker Ocean “Inexcusable”
Fire sale prices
The Fisker Ocean EV was described as “inexcusable” in a harsh Consumer Reports review.
With seemingly no chance to revive the company, the few assets of Fisker Inc. are being liquidated, and that includes 3,000 unsold EVs. Judge Brendan Shannon, who is overseeing the automaker’s bankruptcy, has given the go to sell off 3,000 remaining Ocean SUVs for about $14,000 each to leasing firm American Lease.
Considering that’s less than a third of what Fisker originally was charging for the all-electric Ocean that might seem a real bargain, especially at a time when only a handful of EVs are available for less than $30,000 — and only then after factoring in $7,500 in federal tax credits.
Launched in 2016 Fisker Inc. was the second effort by Danish designer Henrik Fisker to launch his own car company. His first, Fisker Automotive, was liquidated in 2013, its assets sold to a Chinese manufacturer that brought them back to life as the Karma brand.
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