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Fisker May File for Chapter 11 This Week

Fisker Automotive Inc. might file for bankruptcy as soon as this week under pressure from the Dept. of Energy to recoup the $192 million it loaned the hybrid vehicle maker, according to Reuters, which cites unidentified sources.The Anaheim, Calif.-based company’s first payment on that loan is due on April 22.
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Fisker Automotive Inc. might file for bankruptcy as soon as this week under pressure from the Dept. of Energy to recoup the $192 million it loaned the hybrid vehicle maker, according to Reuters, which cites unidentified sources.

The Anaheim, Calif.-based company’s first payment on that loan is due on April 22. Fisker’s board met on Tuesday, reportedly to discuss seeking Chapter 11 protection.

The company dismissed three-quarters of its employees late last week to conserve cash. Talks with potential buyers have collapsed. Founder and Chairman Henrik Fisker quit late last month, citing “major disagreements” with the company’s executives.

In bankruptcy, the DOE would be first in line for proceeds from the sale of Fisker’s assets, which were pledged as collateral for its loan.

The Wall Street Journal cites anonymous sources who say the company is now trying to line up bidders for an eventual bankruptcy court auction.

In Chapter 11, Fisker might be sold without the conditions imposed by the DOE loan that reportedly have deterred many prospective bidders. The company had promised to build cars at its plant in Delaware and hire 2,500 workers there.

A Fisker bankruptcy would be controversial because of the federal assistance. Republicans in the U.S. House of Representatives have already scheduled a hearing for April 24 about Fisker’s downfall. 

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