Fisker bankruptcy costs US taxpayers $139 million
November 27, 2013
Based in Anaheim, CA., Fisker has been in freefall ever since receiving a loan commitment of $529 million from the Department of Energy as part of the Obama administration’s program to support “green-energy.” Fisker is reported to have drawn $192 million of that money, before the DOE suspended funding in 2011, after the automaker failed to achieve adequate sales figures for its $110,000 Karma plug-in hybrid (see http://www.examiner.com/article/fisker-fizzles).
After only being able to recoup $28 million of that money, the Department of Energy sold the remainder of its loan to Hong Kong billionaire Richard Li ‘s Hybrid Technology LLC, for only$25 million. Li is looking to purchase the automaker in bankruptcy, by utilizing a $75 million credit bid based on the money it is owed as the company's senior secured lender. Hybrid, however, announced it would not provide any no-fee bankruptcy financing to Fisker as it hammers out terms for the sale.
Although US Bankruptcy Judge Kevin Gross has put Fisker’s bankruptcy proceedings on the fast track by granting a hearing for the proposed sale on January 3rd.
In the meantime, attorneys for the U.S. trustee and for two unsecured creditors have voiced concerns over the pace of the proceedings, and a former employee has already filed a complaint in the Chapter 11 case claiming that he and another 160 workers were “terminated in April without the required 60 days' notice and are owed almost $4 million in unpaid wages and benefits.”
Fisker's Chapter 11 filing already has resulted in one lawsuit, with a former employee filing a complaint in the bankruptcy case Wednesday claiming that he and some 160 other workers were terminated in April without the required 60 days' notice and are owed almost $4 million in unpaid wages and benefits. A similar lawsuit was filed in April in federal court in California.
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