Fisker Granted Approval to Market Electric Vehicles in North America for $46.25 Million

A bankruptcy court has authorized Fisker to proceed with the sale of over 3,000 Ocean SUVs to a leasing firm, securing the former EV pioneer up to $46.25 million. This move paves the way for Fisker’s structured bankruptcy proceedings and the winding down of its operations.

Late Tuesday, the court endorsed the transaction notwithstanding a solitary significant challenge. The U.S. Trustee, part of the Justice Department, contested that Fisker’s representation hadn’t sufficiently demonstrated that they sought the best deal or adequately justified the valuation of the vehicles. Additionally, the quick pace at which the deal was pursued was a point of contention.

In a document filed Tuesday morning, John DiDonato, Fisker’s chief restructuring officer, provided detailed responses, noting attempts to market the Ocean SUVs to a wide audience, including dealerships and ride-share services, prior to declaring bankruptcy in mid-June.

However, the efforts to find buyers yielded limited success, with American Lease emerging as the only firm commitment to purchase.

Interest from other parties post-bankruptcy was transient, and though another buyer showed interest last week, they later retracted their offer, leaving American Lease as the sole contender.

Judge Brendan L. Shannon recognized the exhaustive search for buyers by Fisker and remarked American Lease as exceptionally accommodating, ready to wait for recall clearances and collaborate on vehicle maintenance and support with the newly established Fisker Owners Association.

Shannon commended the efforts to provide more comprehensive details of the sale process, acknowledging American Lease as the optimal choice.

In the coming days, Fisker is set to transfer about 1,000 Ocean SUVs to American Lease for approximately $14 million, with another 500 vehicles expected to follow soon.

These proceeds will support ongoing operations, including recall management and software updates. Concerns remain over the allocation of the remaining funds from the sale.

Fisker’s significant financier, Heights Capital Management, has played a pivotal role, providing over $500 million in unsecured loans convertible to Fisker stock. Following a covenant breach by Fisker, Heights secured its position with a claim on Fisker’s assets.

The Shadow of Chapter 7

Heights is preparing to shift Fisker’s bankruptcy from Chapter 11 to a Chapter 7 liquidation, pending negotiation outcomes. This stance was evident in recent court discussions, with Heights advocating for an efficient liquidation process.

Despite contention over asset claims, the primary goal was to ensure the vehicle sale’s smooth execution. Fisker’s additional assets, including valuable factory equipment in Austria, remain a part of ongoing bankruptcy considerations.

Efforts to include vehicles in Austria in the sale to American Lease involved careful negotiation, highlighting complexities in handling international assets amid insolvency proceedings.

With the vehicle transactions in motion, emphasis shifts to forthcoming hearings. Legal representatives emphasized the need for adequate time to negotiate and address the complexities involved, stressing the importance of not being restricted by secured creditor claims.