Fisker has hit a hitch at Chapter 11, as the company buying the remainder of the electric-vehicle startup's SUVs indicates it may never consummate the purchase because of an unexpected technical issue.
California, NY-area leasing firm American Lease is arguing that Fisker now believes no means exists to transfer the information tied to each SUV over to a new server that the bankrupt EV startup does not own. The liquidation process of Fisker, which remains in preliminary stages, can't continue as long as it may block access to data that it has transmitted to a party who might not return it -- and that gives American Lease grounds to object and file an emergency objection to Fisker's liquidation plan. Fisker was scheduled to have that plan confirmed in bankruptcy court as early as this Wednesday.
American Lease has already paid over "tens of millions of dollars" since the purchase agreement for the 3,000-plus Ocean SUVs was confirmed in July. Those monies have been helpful because Fisker was using those funds to finance the bankruptcy process. Fisker needed that cash to keep itself alive long enough to settle its debts and also prepare to liquidate what it says is around $1 billion in assets that were, until recently, under control of an Austrian subsidiary that was going through its own insolvency process.
The new twist comes amid a hectic week for Fisker's bankruptcy. Before the scheduled hearing on Wednesday, scores of parties submitted their respective documents that emerged with fresh information. What was unearthed from the objection that the U.S. Securities and Exchange Commission filed was that the agency is actually investigating Fisker. On its part, the Department of Justice objected on behalf of the National Highway Traffic Safety Administration, arguing that Fisker's plan to get owners to pay for specific repairs on recalls is illegal. And the landlord of Fisker's former HQ said the startup abandoned the premises, leaving it in "complete disarray."
American Lease says in its filing that Fisker first mentioned this possibility of not being able to transfer the information to a new server on Friday, October 4, at 8 p.m. ET. And it says that this week, Fisker informed American Lease that it won't be possible at all.
According to the filing by the leasing company lawyers, "The Leasing Company cannot overstate the importance of this unwelcome news, communicated to it only after it has paid Fisker tens of millions of dollars under the Purchase Agreement." "It is unclear at the present time what, if anything, Debtor representatives have known about the impossibility or impracticability of implementing Porting of the Purchased Vehicles, and when they learned or otherwise knew of that critical information.".
American Lease wants its hearing Wednesday adjourned and to be permitted expedited and targeted discovery of Fisker and its representatives to learn, among other things, when Fisker learned of this problem. A representative for Fisker did not immediately respond to a request for comment.