Fisker, the defunct EV startup, has received approval from a bankruptcy judge to sell over 3,000 Ocean SUVs to a vehicle leasing company. This deal will generate a maximum of $46.25 million for Fisker, or approximately $14,000 per vehicle. The judge’s decision came after Fisker faced objections from the Department of Justice’s office of the U.S. Trustee, who argued that the company had not adequately shopped around for the best deal. However, Fisker’s legal team countered these claims by explaining that they had contacted numerous potential buyers before the bankruptcy filing, but American Lease emerged as the only solid lead.
Judge Brendan L. Shannon supported Fisker’s efforts, acknowledging their extensive outreach and documenting the process of selecting American Lease as the buyer. Shannon referred to American Lease as a “purple unicorn” since they not only agreed to purchase the cars but also committed to waiting for pending recalls to be cleared before operating them. They also plan to perform necessary work on the vehicles and collaborate with the newly formed Fisker Owners Association to provide spare parts and software support to owners.
As part of the approved sale, Fisker will sell around 1,000 Ocean SUVs to American Lease, earning approximately $14 million. Another 500 vehicles are expected to be handed over in the following week, generating an additional $6 million. This revenue will help sustain Fisker’s remaining employees working on recalls, software updates, and continued sales.
However, disputes remain regarding the allocation of the money received from American Lease. Fisker’s largest secured lender, Heights Capital Management, intends to convert Fisker’s Chapter 11 bankruptcy to a Chapter 7 liquidation. As a result, Heights asserts its claim on Fisker’s assets and aims to efficiently liquidate them. They emphasize that this case has been “probably the most telegraphed chapter 7 conversion in history.” While Heights’ claim to the assets has faced challenges from the committee of unsecured creditors and the U.S. Trustee’s office, these disputes have been mostly superficial due to the priority of getting the fleet sale approved and preventing a complete collapse of the company.
The situation is further complicated by Fisker’s asset pledge in 2023, where all its assets were pledged as collateral to secure the remaining balance owed to Heights. This potentially allows Heights to claim not just the remaining Ocean inventory but also other significant assets, including factory equipment in Austria, worth hundreds of millions of dollars. Fisker GmbH, the corporate entity overseeing this part of the business, is undergoing its own insolvency proceeding. Negotiations were necessary between Fisker Inc., Fisker Austria GmbH, and the insolvency administrators to include a portion of the inventory in the fleet sale.
Amidst these developments, tensions have arisen due to founder and CEO Henrik Fisker’s wife, Geeta Gupta-Fisker, who serves as CFO and COO. She has fiduciary duties to Fisker Inc., but her involvement in the negotiations with Fisker Austria GmbH has raised concerns. Heights has also submitted a $1 billion claim on the assets involved in the Fisker Austria GmbH proceeding.
With the vehicle sales to American Lease set to commence, further hearings are scheduled for July 22 and July 29. The committee of unsecured creditors hopes to make progress without being hindered by the alleged secured creditor, Heights. They emphasize the importance of allowing sufficient time for negotiations and progress in resolving these complex issues.