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Fisker Automotive Files for Bankruptcy

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Fisker Automotive, maker of the “Karma” plug-in electric hybrid luxury sedan, filed for bankruptcy protection last week, marking an end to a chain of failure that began after the company received a $529 million loan commitment from the U.S. Department of Energy.

Anaheim, California-based Fisker, which planned to assemble Karmas at a former General Motors plant in Wilmington, Delaware, has a hearing scheduled in a Delaware court on January 3rd of next year.

Fisker burned through $192 million of the $529 million U.S. DOE green-energy loan, before officials suspended funding in 2011, after the automaker failed to deliver on any established sales tiers for its Karma. The DOE managed to recover roughly $28 million from Fisker last week, before selling the remainder of the loan to Hybrid Technology LLC, culminating in a loss of $139 million for taxpayers.

Below is a clip of the $100,000 Fisker Karma breaking down on the Consumer Reports Test track:

Taxpayers in Delaware will foot the bill for roughly $20 million in loans and grants afforded to Fisker, which were intended to recommence car production at the defunct General Motors plant in Wilmington. Fisker, which currently has about $20,000 in available cash, has also been sued by a former employee, who along with 160 others, was laid off without the required 60 days notice. The workers seek roughly $4 million in back pay and benefits.

Fisker attorney Ryan Preston Dahl says the company fell into a “perfect storm” of operational and financial complications, including production delays which resulted in the suspension of the DOE loan. Dahl also cited a problem with the main battery supplier for the electric Karma, as well as hundreds of prototypes being destroyed during “Frankenstorm” Sandy, at a port in New Jersey.

Hybrid Technology LLC, owned by Hong Kong billionaire Richard Li, who seeks to buy Fisker, plans to use a $75 million credit from money it is owed as Fisker’s largest secured lender.

Image via Wikimedia Commons.

Fisker Automotive Files for Bankruptcy
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  • Ted Turner

    Thank you “WebProNews” for keeping us all abreast if the news which there was no mention of this car a few years ago!!
    L A M E !!!!!!!!!!!!!!

    • Saleen S7R

      WOW, this cars on board electric generator is a great combination for extending the range, styling was superb, and the quality was overall top notch except for that self igniting issue. You have to take a look at General Motors EV-1 and Toyota’s Prius roll out. Both of them knew these cars where too expensive for the general public, General Motors was in a financial crisis and Toyota wasn’t. Toyota took it upon themselves to eat the cost of the expensive components to simply roll the product out successfully. As for them self igniting in the Sandy storm, that’s an easy fix that should of been taken a long time ago.

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