Is bankruptcy in Fisker's future?
The luxury plug-in hybrid automaker is rumored to be working on the paperwork needed to file a Chapter 11 bankruptcy within the week.
Tue, Apr 09, 2013 at 01:01 PM
Photo: Melissa Hincha-Ownby
The Fisker Karma is a sexy plug-in hybrid luxury car with distinct lines. If a Karma is on the road, heads are turning. Unfortunately, the automaker doesn’t have much else going for it at this time. Last week, the company laid off about 150 of its 200-person workforce and this week rumors are swirling that Fisker is preparing to file a Chapter 11 bankruptcy within next week.
A look at Fisker’s problematic history includes:
- In 2012, a Karma died after a Consumer Reports test drive
- 239 Fisker Karmas were recalled after a defect was discovered in A123 systems batteries
- Henrik Fisker was replaced as Fisker’s CEO by Tom LaSorda in early 2012
- Tony Posawatz replaced LaSorda as CEO in August 2012
- Henrik Fisker resigned from the company in March 2013
When Henrik Fisker resigned from his namesake company last month, automotive enthusiasts began to ask, “What’s next?” Although the luxury plug-in hybrid vehicle is beautifully designed and the company and the car have both been plagued with problems from the start, the Karma’s technology is still attractive. Now that Fisker was out, would another automaker step in and buy the company?
MNN automotive blogger Jim Motavalli examined several possible scenarios including buyouts from BMW or Volvo but now that bankruptcy is on the table, there may be more buyers interested in Fisker. But this won’t be a typical corporate bankruptcy; this process would involve the federal government.
“In a bankruptcy case, the DOE would be Fisker's senior creditor and have a large say in any sales process or financial restructuring of the electric-car maker. The DOE could, depending on the circumstances, end up owning Fisker since the company's equipment and property are pledged as collateral on its loan. Fisker could also attempt to repay as much of the loan as possible through proceeds from a sale, if it can reach a deal with a buyer.” Source: Wall Street Journal
If Fisker does file bankruptcy, this will be another feather in the cap of green energy naysayers.