- The bankrupt car manufacturer has avoided Chapter 7 liquidation, which is good news for owners.
- Fisker’s owners’ association will have a say in the sale of the brand’s intellectual property.
- There are several open recalls for the Fisker Ocean in the U.S.
Fisker’s collapse wasn’t just bad news for its founder, investors, creditors, and the EV market as a whole, but also for its owners who are at risk of losing support for their freshly-delivered electric SUVs. Fortunately, they have received a small reprise.
The car manufacturer has reached an agreement in U.S. Bankruptcy Court in Delaware that will allow it to avoid Chapter 7 liquidation and remain in Chapter 11 bankruptcy. This is important as Chapter 7 would have forced it to liquidate its non-exempt property, whereas Chapter 11 means it can continue to reorganize its assets and debts. Additionally, its management team will remain in charge for some time as the business winds down.
Read: Fisker Files For Bankruptcy After All Rescue Attempts Fail
How does this impact owners? Well, there are still several open recalls out for the Fisker Ocean and this will allow the company to make the necessary updates to ensure they’re safe. The owner’s association will also have a voice in the sale of Fisker’s intellectual property, including designs and its computer code. This will help to ensure owners get long-term access to Fisker’s cloud software that can be used for future over-the-air updates.
“The owners strongly believe that Fisker owes them a responsibility to ensure that their vehicles are safe and operable, and that the best way for Fisker to fulfill that promise is through a Chapter 11 process,” attorney for the Fisker Owners Association, Daniel Shamah, said. “We can be sure that employees and the advisors who are helping the company do this remain on board.”
Those shareholders who invested are unlikely to get their money back, however.
The LA Times reports that Fisker produced a touch over 11,000 Oceans before it ordered contract manufacturer Magna Steyr to stop production in Austria. A company based out of New York that leases Uber and Lyft cars was recently approved to buy Fisker’s remaining inventory of 3,321 Oceans for $46.25 million.
