Fisker one step closer to bankruptcy, future in Delaware uncertain
Attorneys for Fisker Automotive appeared in District of Delaware United States Bankruptcy court this afternoon to take another step forward in the sale and liquidation of the luxury car manufacturing company.
Judge Kevin Gross signed a provisional order to allow the automaker to move forward with a bankruptcy deal. Fisker’s legal team and attorneys representing the Unsecured Creditors Committee talked for more than 20 minutes about whether the proceedings were moving too fast. They agreed to keep the deal moving.
“I think we all agree it’s in the best interest to keep the sale and the plan together,” said Sunni Beville, a partner with Brown and Rudnick and representing the UCC.
In October the U.S. Energy Department auctioned Fisker’s $168 million federal loan and Hybrid Technologies, LLC purchased the debt for an undisclosed amount of money. Beville said it’s in everyone’s best interest to take advantage of the sale.
“We need to take advantage of Hybrid wanting to get this done quickly,” she said.
Fisker's rise and fall has been equally as quick. In 2009 Henrik Fisker was on stand with Delaware leaders and Vice President Joe Biden hailing an agreement to build cars at the former General Motors plan. Fisker was on pace to receive more than $500 million through the Advanced Technology Vehicle Manufacturing loan program distributed through the U.S. Energy Department. When that loan was frozen, Fisker's fortunes went south.
The automaker promised to create thousands of jobs through manufacturing and sales of its $100,000-plus hybrid luxury sports cars.
Approximately $192 million had been disbursed before the loan payments were frozen because the company failed to meet benchmarks.
Earlier this month, Fisker filed for Chapter 11 bankruptcy protection after months of speculation that the company was in financial distress.
Trouble in Delaware
In addition to the federal loans, Fisker secured $12.5 million in incentive loans from the state of Delaware to establish a manufacturing plant in the state. More than $7 million in utility bills have been racked up at the plant in Newport, which the state has paid as part of the original incentive deal, according to The News Journal.
Many questions remained unanswered including whether or not Delaware will be able to recoup any of the money that the state is owed. There are also concerns about what Hybrid Technologies will do with the Delaware plant.