Creditors of the former Fisker Automotive Holdings Inc. want a bankruptcy court to permit them to submit their own liquidation plan for the collapsed carmaker. They are claiming that Fisker – now known as FAH Liquidating Corp. -- is asserting on terms that could cause on harm on unsecured creditors and place plan-approval at risk.
Lawyers for the creditors' committee said in a filing in the United States Bankruptcy Court in Wilmington, Delaware that if permitted, the creditors would offer a "consensual plan of liquidation" that leads to the "best possible" outcome and brings the bankruptcy process to a quick and cost-efficient conclusion.
The court approve in February the sale of FAH’s assets to Wanxiang Group Corp. for $149.2 million, which is nearly six times than what the defunct hybrid-car maker sought when it filed for bankruptcy.
The creditors committee and Hybrid Tech Holdings LLC, which acquired the US government-backed loan granted to Fisker for $25 million, reached a deal in April on how to divide the sale proceeds, the unsecured creditors said in court papers.
According to the creditors, they can have a liquidation plan submitted within days of receiving court permission. The committee said in court documents the creditors’ proposal would be similar to FAH's own plan to the point that it retains the same economic terms but removes the demands that "impair creditor recovery," including a $750,000 bonus for the chief restructuring officer.
The committee said the demands would render the bankruptcy costlier to conclude, delay creditors' distributions and deter the ability of a liquidating trustee from doing its duties. Fisker sought bankruptcy protection in November 2013 and has listed assets of up to $500 million and debt of up to $1 billion.
Fisker attributed its collapse to the bankruptcy of battery supplier A123 Systems Inc., safety recalls and shipments lost to Hurricane Sandy. Fisker was granted $529 million in loans by the US government and drawn around $192 million of it. It, however, missed the first payment on the loan.
Being the first car to be developed by Fisker Automotive, the Karma was made to follow the company’s very own Sustainable and Accountable Design philosophy. It is because of this that Fisker is confident in saying that this new model symbolizes that exciting leap forward for the whole automotive industry. At the onset, the company realized that creating a car takes a large amount of resources and energy. This includes developing, building, marketing, and even disposing of the cars.
Given that Fisker would be able to start from scratch, it meant this was a chance to not only improve the entire process but also to re-imagine what customers could expect from auto manufacturers. Fisker hopes to become an automaker that is truly committed when it comes to accountability and sustainability.
To make this happen, the company said it will continuously look for ways to lower the environmental impact and increase the efficiency all through the whole value chain, which includes the carbon footprint. Fisker revealed that starting with the Karma, all models to come from the company will be sold and even serviced using a worldwide network composed of independent, reputable, and established retailers.
In fact, the company has already identified a total of 45 locations in the U.S. and expects around the same number for Europe. Specifically for the European market, Fisker said it is still developing the retail network but projects that it will be managed by different importers.
These include Fisker Italia in Merano, Italy, Nellemann located in Copenhagen, Denmark, and Emil Frey Group based in Zurich, Switzerland. Rounding off the company’s presence in Europe is BD Otomotive, which is in Istanbul, Turkey. Fisker will also be making its presence felt in Asia and has signed with China Grand Automotive a non-exclusive distribution agreement in December 2010 at Shanghai.