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Fisker Preparing for Bankruptcy?
Beleaguered Fisker Automotive Inc. could file for Chapter 11 bankruptcy protection as soon as this week, according to Reuters, which cites unnamed sources.
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Beleaguered Fisker Automotive Inc. could file for Chapter 11 bankruptcy protection as soon as this week, according to Reuters, which cites unnamed sources.
Fisker faces a $10 million payment on April 22 against a $192 million loan it received in 2010 from the U.S. Dept. of Energy. Reuters reported last week that the company has at least $30 million in cash.
The company dismissed most of its employees late last week to preserve the value of its assets. Talks with potential buyers have collapsed. Founder and Chairman Henrik Fisker quit late last month, citing "major disagreements" with the company's executives.
If Fisker files for bankruptcy, the DOE would be first in line for proceeds from a sale of the company's assets, which were pledged as collateral for its loan. Unidentified sources tell The Wall Street Journal that the hybrid carmaker is already trying to line up bidders for an eventual bankruptcy auction.
Observers note that in Chapter 11, Fisker might be sold without the requirements for U.S. employment and production imposed by the DOE loan. Those restrictions reportedly have deterred several prospective bidders, including China's Dongfeng Motor and Zhejiang Geely.
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