Written by Cláudio Afonso | LinkedIn | X
Electric vehicle (EV) maker Fisker Inc. and its affiliates are moving toward the concluding phase of their Chapter 11 bankruptcy process.
The United States Bankruptcy Court for the District of Delaware has slated the decisive hearing for July 16, at 11:00 a.m. (ET). This session is seen as crucial in defining the company’s restructuring path.
Fisker Inc., including subsidiaries such as Fisker Group Inc., initiated Chapter 11 filings on June 17 and 19. Following a preliminary hearing on June 21, 2024, the court provisionally approved several critical motions.
These motions address key operational components, including the management of transfers and claims, continuation of insurance policies, and payment of prepetition taxes and employee benefits.
The scheduled hearing on the cash collateral motion for June 27, has been canceled. The initial hearing took place on June 21, 2024, as planned, following Fisker Inc.’s bankruptcy filing on June 17, 2024.
As reported on Thursday, the official “Notice of Filing of Creditor Matrix” lists some high-profile names and entities associated with the company’s operations including the founder and CEO Henrik Fisker, and also Geeta Gupta-Fisker, Fisker’s Chief Operating Officer and CFO.
The document also lists a variety of well-known creditors, including Berkshire Hathaway Specialty Insurance, a major insurer controlled by Warren Buffett. Bridgestone Americas, Inc., Fisker’s tire supplier, and Toyota Boshoku America, Inc., an automotive component manufacturer, are also among the firms listed.
Magna International Europe GmbH and its subsidiaries, Fisker‘s manufacturing partner for all the Ocean SUVs produced, are also listed. Additionally, Ford Motor Credit Company is included, reflecting the financial interconnections within the automotive industry.
The bankruptcy has triggered an automatic acceleration of its debt obligations under its 2.50% convertible senior notes due 2026, according to a recent 8-k form. There was a scheduled hearing for this later today, June 27, to discuss the cash collateral motion. However, the hearing was cancelled.
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Fisker is striving to provide a service network to the customers after filing for Chapter 11 bankruptcy protection last week.
According to unofficial information from a Fisker employee, the company is currently operating with a very small team in Germany and has closed its store in the center of Munich.
Last week, 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.
Despite these hurdles, Fisker is actively working to build a comprehensive service network in Germany, with efforts focused on Munich and Berlin, and potentially expanding to Hamburg.
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.
The chief executive Henrik Fisker made recently 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.
Written by Cláudio Afonso | LinkedIn | X
