Fisker Finally Files For Chapter 11

Fisker Finally Files For Chapter 11

After billionaire Richard Li lead a group winning the DoE auction of Fisker Automotive's debt to the government, and thereby essentially taking control of the company, it was only a matter of time before bankruptcy was announced.

The last Fisker Karma Was Built In July of 2012

The last Fisker Karma Was Built In July of 2012

And that day came this week, as a Chapter 11 petition was filed in U.S. Bankruptcy Court in Wilmington, Delaware, on Friday, November 22.

The Pacific Century Group's offer has spawned a company called "Hybrid Technology LLC", which is taking over at the helm at Fisker.  The new company will provide $8 million in financing (DIP) to fund the sale and Chapter 11 process.

Through this filing we now also know that the group paid $25 million to the DoE for the right to control Fisker's future, - meaning the government only recouped $53 million of the $192 million originally invested - good for a loss of about $139 million.

Naturally, government officials had their own special way of expressing this transaction:

"Because of these actions, along with the sale announced today, the Energy Department has protected nearly three-quarters of our original commitment to Fisker," said Bill Gibbons, a DoE spokesman.

Fisker had won a $529 million loan in 2009 as part of the ATVML program and was being granted payouts on that loan by the Deptartment of Energy as they reached proformance benchmarks before being cut off in 2011.

An Investor Group Lead By Richard Li Paid $25 Million To The DoE For Control Over Fisker

An Investor Group Lead By Richard Li Paid $25 Million To The DoE For Control Over Fisker

Other points of interest disclosed in the filing:

  • Fisker listed assets of as much as $500 million 
  • Debt of as much as $1 billion
  • Largest creditor without collateral - BMW Group at $74 million
Production of the Fisker Karma stopped about 18 months ago, but this move will open the door for production to be restarted eventually - if that is the intent of Hybrid Technology LLC.

"As we continue to examine Fisker's opportunities, we will be making decisions  about the structure and footprint of the new business," -  Caroline Langdale, spokeswoman for Hybrid  Technology

Official Fisker Statement on the Filing:

Fisker Automotive Announces Agreement for Asset Sale to Hybrid Tech Holdings

ANAHEIM HILLS, Calif., Nov. 22, 2013 /PRNewswire/ -- Fisker Automotive, Inc. and Fisker Automotive Holdings, Inc. (collectively, Fisker Automotive) announced today that they have entered into an asset purchase agreement with Hybrid Tech Holdings, LLC (Hybrid) for the sale of substantially all of its assets.

Hybrid is the lender under an approximately $170 million loan secured by first liens on substantially all of Fisker Automotive's assets. Hybrid's parent, Hybrid Technology, LLC (Hybrid Technology), purchased the loan from the U.S. Department of Energy (DoE) after DoE conducted a robust marketing process and auction.

To facilitate the sale process and provide for orderly distributions to creditors, Fisker Automotive has voluntarily filed petitions under Chapter 11 of the U.S. Bankruptcy Code. Hybrid Technology has committed up to approximately $8 million in debtor-in-possession (DIP) financing to fund the sale and Chapter 11 process.

"After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders," said Marc Beilinson, Fisker Automotive's Chief Restructuring Officer. "We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership."