Fisker’s plan to sell its unsold Ocean SUVs to American Lease faces a significant obstacle as the U.S. Trustee’s office opposes the deal.
This sale, crucial for keeping Fisker’s bankruptcy proceeding afloat and repaying some creditors, could generate up to $46.25 million by transferring the SUVs to American Lease, a company servicing ride-hail drivers in New York City.
The objection, filed by the U.S. Trustee, raises concerns about the sale’s transparency and fairness, suggesting that Fisker did not adequately market the vehicles or explore other potential buyers.
Fisker has garnered extensive support for the sale. The company’s primary secured lender backs the deal, and the committee of unsecured creditors, including Fisker’s contract manufacturer Magna, also approves. The newly formed Fisker Owners Association supports the sale on the condition that spare parts are made available and clarity is provided on addressing an open recall concerning the Ocean’s water pump.
A hearing is set for Tuesday morning, where arguments will be presented before a Delaware Bankruptcy Court judge. Fisker argues that the sale needs to proceed promptly to provide financial stability for the ongoing bankruptcy process. The company claims its total assets range between $500 million and $1 billion but has requested a delay in releasing this information, stating it is still being compiled.
The U.S. Trustee’s office, in its filing, criticized Fisker for:
- Rushing the sale, including scheduling an emergency hearing just before the July 4th holiday.
- Not providing enough information about the marketing process or vehicle valuation.
- Selling the SUVs at “fire sale prices” without adequate marketing to maximize value.
- Scheduling a sale hearing on one week’s notice over a federal holiday and pursuing a private sale to one buyer.
They also questioned why American Lease initially agreed to purchase 2,000 Oceans for a higher price before the bankruptcy, which would have netted Fisker around $40 million.
Ideal Motors, one of Fisker’s dealer partners, also objected to the sale, arguing it was not properly notified and highlighting the unprecedented speed of the process. Despite this, the committee of unsecured creditors now supports the sale to American Lease, believing it to be the best offer under the circumstances and beneficial for all stakeholders.
Fisker’s Chief Restructuring Officer, John DiDonato, and the company’s lawyers previously argued that a rushed sale was necessary to make payroll and keep the bankruptcy proceeding alive. However, after reassessing their assets, they delayed the sale to allow more input. Founders Henrik Fisker and Geeta Gupta-Fisker have reduced their salaries to $1 to help manage costs.
The decision now rests with the Delaware Bankruptcy Court judge, who will determine the fate of Fisker’s proposed sale.
Featured Image courtesy of Kyle Grillot/Bloomberg via Getty Images
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