Electric vehicle startup Fisker has secured court approval for its bankruptcy liquidation plan, allowing the company to proceed with the sale of its remaining fleet of approximately 3,000 Ocean SUVs. The approval came after a crucial deal was reached to ensure continued vehicle tech support, vital for the future of the cars and the company’s creditors.
The plan was approved by U.S. Bankruptcy Judge Thomas Horan during a hearing held in Wilmington, Delaware. Fisker is now cleared to settle its debts with creditors using the proceeds from the liquidation of its vehicle inventory, following the $46 million sale to American Lease.
Fisker, once a promising player in the electric vehicle (EV) market, filed for bankruptcy in June after its attempts to secure a production partnership with Nissan failed. As its cash flow problems worsened, the company was forced to pause vehicle production and lay off staff, ultimately opting for liquidation rather than further attempts to restructure its business.
In the bankruptcy proceedings, Fisker chose to sell its remaining fleet and transfer its intellectual property to creditors, effectively ending its operations as a functioning EV manufacturer. However, the liquidation process hit a roadblock when it became clear that critical tech services, such as vehicle software updates and diagnostics, could not be transferred seamlessly to the new buyer.
The issue arose when American Lease, the buyer of Fisker’s vehicle fleet, discovered that Fisker’s infrastructure could not provide essential data and support services required to maintain and service the vehicles. Without access to the company’s servers, American Lease would be unable to offer features such as remote vehicle access, software updates, and diagnostic capabilities for the vehicles.
To resolve the matter, American Lease and Fisker reached an agreement whereby American Lease would pay an additional $2.5 million over five years for continued tech support services. This agreement ensures that not only will the new fleet owners have access to necessary services, but it also addresses concerns raised by existing Fisker Ocean owners regarding the continuity of support after Fisker’s servers shut down.
Fisker’s bankruptcy follows a wave of recent insolvencies in the highly competitive EV market, as several companies struggle with weakening demand, fundraising challenges, and operational hurdles related to global supply chain issues. Companies like Proterra, Lordstown, and Electric Last Mile Solutions have also filed for bankruptcy in the past two years, underscoring the volatile landscape for new electric vehicle manufacturers.
Fisker’s liquidation signals the end of one more ambitious EV startup’s journey, but the deal with American Lease at least offers a path forward for those who have purchased or are considering purchasing Fisker’s vehicles.
Now that the plan is approved, Fisker can begin repaying its creditors with the funds from the sale of its remaining assets. The deal not only secures continued vehicle support for the buyer but also addresses the concerns of Fisker’s creditors and vehicle owners, setting the stage for closure of the company’s remaining obligations.
In the wake of the approval, industry observers are keen to see how the broader electric vehicle market adjusts to the growing number of liquidations and what this means for the future of EV manufacturing.
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