Fisker Automotive Files for BankruptcyBy: Mike Fossum - November 27, 2013
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.