Fisker May File Chapter 11 Bankruptcy This Week

by San Antonio Attorney

American car maker Fisker Automotive could declare bankruptcy within the week considering that the government is pressuring the company to repay almost $200 million in loans.

The Department of Energy appears to be pressing a bankruptcy filing by Fisker, according to various sources familiar with company. Bankruptcy papers have been drawn up by the company lawyers who are prepared to file, according to one of the sources.

The board of directors will consider its options on Tuesday, and directors will likely decide about the timing of filing, the source said.

The partnership of Fisker and DOE has been on the verge of conflict in the past months during the time when Fisker’s management have been unsuccessfully trying to find buyers, primarily in Europe and China, to avoid bankruptcy.

One of the sources familiar with the matter said the government agency wants to resolve the problem before the new DOE secretary comes so they are pressuring Fisker to pay back. The government also wants to distance itself from the company’s widely publicized financial problems.

Fisker representatives could not be reached for comment. DOE representatives were also unavailable to give a comment.

The car maker is known for its steeply-priced Karma hybrid sports car, but it has not produced a single vehicle since July. It has been unsuccessful in finding a buyer while its money reserves are depleting.

The company is also facing a class action lawsuit brought by many of its previous employees who were terminated without severance payments.  Fisker said its move to terminate 75 percent of its workforce in the U.S. was necessary. It retained around 50 senior managers and executives.

Fisker currently has $30 million in available cash and has to make a $10 million payment to the DOE two weeks from now, according to the sources.

 

– Bankruptcy protection allows a business or person to reorganize or restructure finances. A business can seek protection through Chapter 11, while an individual can file for Chapter 13. If you want to know if you meet the requirements to receive Chapter 13 protection, it is important to talk to a San Antonio Chapter 13 Attorney.

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