The Fisker Karma

Fisker faces bankruptcy as workers file suit over layoffs

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Fisker Automotive could files for Chapter 11 bankruptcy protection this week as the company faces a massive government loan payment later this month – with the whole situation being complicated by a lawsuit filed by one of the employees who was laid off last Friday that, if successful, could lead to more suits of a similar nature.

The Fisker Automotive board of directors was scheduled to meet this morning and among the topics of discussion would most certainly be the possible timing of Chapter 11 bankruptcy filings. Based on the results of today’s meeting, Fisker could enter bankruptcy proceedings within the week as the failing automaker works to protect what few resources that they have left.

Fisker is expected to make a $10 million dollar payment on their $200 million dollar Department of Energy loan and while the company allegedly has about $30 million in hand – the company realistically will not have the money to ever pay back that government loan. The company has built a car in ages and with a great many of the vehicles already built being destroyed earlier this year, Fisker has no way of generating the kind of revenue needed to pay back the DoE loan. With all of the interested suitors pulling their interest after company founder Henrik Fisker left last month, bankruptcy appears to be the only option left as the company enters its final days. Fisker has previously attempted to renegotiate the terms of the government loans but with the company in very bad shape, the feds aren’t too likely to allow for any reductions in payment or extensions unless Fisker finds a new owner or some serious investors very quickly. After raising over a billion dollars in private funding over the past few years, it would be a miracle to find anyone else willing to dump money into a failing company now without their leader so a last minute sale seems like the only possible salvation from bankruptcy.

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Comments

So the workers at a company that has no product, and is being propped up by taxpayer money, now want to sue because the company is going out of business? Sounds like the jobs bank wasn't just an anomaly in this crazy industry. Maybe the company's managers did know the law would apply, and they are purposely creating the scenario that would allow the workers to tap into that last $30 million as opposed to say, have it go back to the taxpayers? Or private investors. Or the state of Delaware which lost 7 figures of taxpayer dough keeping an empty factory warm last year.
That's possible, John, but given history, the government will get first call on $ in a bankruptcy, not employees. They are always "top creditor" in a bankruptcy scenario. Plus this lawsuit will likely take weeks (or more), by which time Fisker will likely already be well into bankruptcy.
I wish Elon would wait til a second after bankruptcy and then grab this awesome car and make it the Model K. Such a shame to see the car just go away.
Fiskers equipment and facilities were used as collateral for the DOE loan, so potentially the DOE could own this company. Government Motors could expand here. Yahoo! Thank you, can I have another.

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