NEW YORK (Reuters) – Electric vehicle startup Fisker is headed towards a liquidation, attorneys said in U.S. bankruptcy court on Friday, as two creditor factions previewed a battle over which group will be paid first.
Fisker filed for bankruptcy protection in Delaware on Monday due to cash depletion from scaling up Ocean SUV production. Initially aiming for additional financing and reduced operations, Fisker’s attorney Brian Resnick expressed doubt at the Wilmington hearing about securing funding.
Resnick told U.S. Bankruptcy Judge Thomas Horan that the company planned to liquidate its assets, and it has reached a tentative deal with a single buyer for all of its 4,300 vehicles.
The California-based company, founded by automotive designer Henrik Fisker, was never profitable, with about $273 million in revenue in 2023 and a net loss of $940 million.
Fisker owes over $850 million to two groups of bondholders, and attorneys for the larger group accused a minority faction led by Heights Capital Management of seizing control of Fisker’s debt in November through a “suspect” transaction with Fisker.
At the time, Fisker was late in providing audited financial statements due under its debt agreements, and Heights used that “minor, technical default” to claim all of Fisker’s assets as collateral on its bonds, Alex Lees, an attorney for other bondholders, said.
As Fisker approaches potential liquidation, the outcome of the financial dispute will significantly impact stakeholders, including employees, investors, and suppliers.
In conclusion, the Fisker financial dispute highlights the complexities and challenges faced by companies in financial distress. The resolution of this dispute will shape the future trajectory of Fisker and impact its stakeholders.
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