Written by Cláudio Afonso | LinkedIn | X
Electric vehicle startup Fisker, which filed for Chapter 11 bankruptcy protection last week, has triggered an automatic acceleration of its debt obligations under its 2.50% convertible senior notes due 2026.
This information is revealed in an 8-K form signed by Fisker’s Chief Restructuring Officer John DiDonato. There is a scheduled hearing this Thursday (June 27) to discuss extending access to these funds further.
This acceleration clause, activated by the bankruptcy filing, results in the immediate obligation to repay both the principal and interest on these notes.
The filing, initiated by Fisker Group Inc. last week (June 17) and followed by other U.S. subsidiaries later in the week (June 19) constitutes an event of default under the terms of the notes’ indenture, thereby expediting the debt repayment schedule.
However, any efforts to enforce such payment obligations are automatically stayed under the Bankruptcy Code provisions, according to the filing.
Fisker and its subsidiaries, referred to as “Debtors,” will continue their operations as “debtors in possession,” meaning they retain control over their business operations while they reorganize under bankruptcy protection.
Additionally, the court has approved Fisker’s request to use cash collateral until June 28, ensuring the company has the necessary funds to operate.
On Friday, a group of early adopters of Fisker vehicles announced the formation of a non-profit association, aimed at ensuring continued access to parts and services for owners as the startup filed for bankruptcy protection in Delaware.
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Last Thursday, the chief executive Henrik Fisker made his first public appearance of the year, delivering a keynote speech at the ET Auto Summit. However, the former automotive designer avoided the topic and did not comment on Fisker’s situation.
The newly established Fisker Owners Association (FOA) aims to provide members with up-to-date information on vehicle maintenance and facilitate communication with service departments.
According to the bankruptcy documents, Fisker has an inventory of 4,300 unsold vehicles parked on different storage lots. In late May, EV reported that an increasing number of Fisker SUVs had been accumulating in a storage lot at the San Diego port, sparking concerns about potential demand or distribution issues.
Last Wednesday, also Fisker Inc. and its other U.S. subsidiaries have entered into Chapter 11 while adding that the “company’s discussions regarding the sale of its assets remain ongoing,” the startup revealed.
In a new statement, the company said, “Following on the announcement that Fisker Group Inc. filed for Chapter 11 protection in the District of Delaware, Fisker Inc. and its other U.S. subsidiaries have entered into Chapter 11. The Company’s discussions regarding the sale of its assets remain ongoing”.
Written by Cláudio Afonso | LinkedIn | X
