Written by Cláudio Afonso | LinkedIn | X
In a high-stakes court hearing presided over by Judge Horan, the electric vehicle (EV) maker Fisker, Inc. was challenged regarding their accelerated sale motion. The hearing was conducted via Zoom on Wednesday, July 3, and EV had access to the audio file.
Earlier this week, the company requested the approval for selling 3,321 Ocean SUVs to a NY-based leasing firm named American Lease in a move that would give Fisker $46.25 million at an average price of nearly $14,000 per vehicle.
The motion was filed to expedite the sale of Fisker’s fleet to ensure liquidity and meet critical financial obligations by mid-July. Below is the audio file with the recording of the hearing.
Brian Resnick, representing Fisker in the hearing, initiated the proceedings by presenting and urging the company’s sale motion.
“Receiving the proceeds on that timeline, Your Honor, we also need entry of which we expect to be negotiated with our security lender, and receipt for their inventory due to fleet sales agreement,” he stated.
Resnick explained, “The sale motion, docket number 110, was previewed by us, the entirety of the debtors, June 30th, and the sale hearing, and these, and others. So, to put it another way, Your Honor, we immediately filed the motion. By the end of next week, it brings me to the motion to shorten it up to basically seven days after the filing of it.”
Linda Richenderfer from the U.S. Trustee’s Office raised substantial objections to the accelerated timeline proposed by Fisker. She highlighted the lack of sufficient notice and preparation time for stakeholders to review and respond to the sale motion.
Richenderfer stated, “While the committee has a duty to all unsecured creditors, it seems to me there are other people out there who will want to be heard on this issue.”
She also noted, “The work that was mentioned to me last Wednesday that needed to be done apparently still needs to be done, and it’s my understanding that title cannot pass to the cars until the work is done.”
Daniel Schama, representing over 2,000 members of the Fisker Owners Association, expressed apprehension regarding the potential impacts of the sale on existing vehicle owners.
Concerns included the continuity of software updates and other vehicle support services post-sale. Schama remarked, “We have concerns around the sale and the impact it’ll have on existing vehicle owners, with software updates, a litany of issues that pose transactions.”
The U.S. Trustee’s office also pointed out discrepancies in the timeline and the rationale for the accelerated sale. Richenderfer mentioned, “I know that various people have passed on to me that, you know, the committee thought, well, maybe we could ask Judge Brand to push the motion to shorten notice until Friday after the committee has counseled, and they can come back and talk about it.”
Laura Appleby, from the Affairs Committee, echoed the call for delay. She argued that the committee, which had just begun its work, required additional time to engage counsel, review the sale motion comprehensively, and provide informed advice to the committee and the court.
Appleby stated, “We would ask that, at the very least, the court adjourn this hearing until Monday to allow for a committee counsel to get in place and have that dialogue in advance of moving forward on the sale motion.”
Judge Horan acknowledged the concerns raised by multiple parties and questioned the rationale behind the accelerated process.
He indicated the need for a more balanced approach that allows for thorough review and participation by all affected parties. “Mr. Resnick, you have some significant headwinds here,” said Judge Horan, highlighting the numerous objections and issues raised during the hearing.
In his closing remarks, Judge Horan emphasized, “This court is mindful of the urgency presented by Fisker Inc. but must also uphold the principles of fairness and due process. Therefore, I am inclined to consider a reasonable extension to ensure all parties have adequate time to review and respond appropriately. A decision will be made after further deliberation.”
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On Friday, the company issued a recall of 8,204 Ocean SUVs in the United States due to a defect with the exterior door handles that can cause them to stick and not open, the U.S. National Highway Traffic Safety Administration (NHTSA).
Earlier this month, a group of early adopters of Fisker vehicles announced the formation of a non-profit association, aimed at ensuring continued access to parts and services for owners as the startup filed for bankruptcy protection in Delaware.
As reported on Thursday, the official “Notice of Filing of Creditor Matrix” lists some high-profile names and entities associated with the company’s operations including the founder and CEO Henrik Fisker, and also Geeta Gupta-Fisker, Fisker’s Chief Operating Officer and CFO.
The bankruptcy has triggered an automatic acceleration of its debt obligations under its 2.50% convertible senior notes due 2026, according to a recent 8-k form. There was a scheduled hearing for this later today, June 27, to discuss the cash collateral motion. However, the hearing was canceled.
Fisker is striving to provide a service network to the customers after filing for Chapter 11 bankruptcy protection last week.
According to unofficial information from a Fisker employee, the company is currently operating with a very small team in Germany and has closed its store in the center of Munich.
Written by Cláudio Afonso | LinkedIn | X
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