Fisker preparing to file Chapter 11 within the next few days

Article by Christian A., on April 10, 2013

Sources say that Fisker is preparing to file Chapter 11 and that this may take place within the next few days. It’s believed that Fisker’s lawyers have readied the bankruptcy documents and that options will be discussed on Tuesday at a meeting to be attended by Fisker's board of directors.

The source said that the directors, who have not given up on a potential sale, are likely to choose the best time for a possible Chapter 11 bankruptcy filing at that time. In the past several months, the relationship between the DOE and Fisker has been tense.

The top Fisker executives have been ineffectively trying to draw in buyers, primarily in China and Europe, to hinder bankruptcy. The source said that the government hopes to put a distance between it and Fisker's financial struggles so that the next DOE secretary won’t have to handle the problem.

No official comments have been made by DOE or Fisker. Since last summer, Fisker has not produced a vehicle and has not succeeded at getting a buyer and so, its cash reserves have diminished.

It was also reported that Fisker terminated 75% of its U.S. workforce, keeping just 50 senior managers and executives, to save sufficient cash to avoid violating a covenant in its deal with the DOE. Source said that Fisker currently has cash of about $30 million and faces a $10 million loan payment to the DOE on April 22.

Motorists may shy away from electric vehicles mainly because of its limited range. Although EVs have the ecological advantages, they cause range anxiety and they are not so cheeky in terms of styling, luxury and performance. Now, Fisker Automotive intends to settle these issues with the new Fisker Karma. With a name derived from a Hindi term that implies good action gets good results, the new Fisker Karma redefines electric vehicles by fusing elegant and sporty design, luxurious comfort, high performance, low fuel consumption and zero emissions on demand. It also eases range anxiety as it is the first true Electric Vehicle with extended range (EVer).

These are attributes that both typical EVs and luxury vehicles do not all possess. After all, the new Karma embodies Fisker’s commitment to creating Uncompromised Responsible Luxury vehicles that deliver Pure Driving Passion. Due to arrive this summer, the Fisker Karma is setting a new standard for time-to-market after it was presented as a concept in 2008. Built according to Fisker’s Sustainable and Accountable Design philosophy, the new Karma boasts of having the proprietary EVer powertrain as its core.

Inspired by a military stealth vehicle, EVer allows the Fisker Karma to dash from nil to 60 mph in just 5.9 seconds while returning over 100 miles per gallon of fuel and emitting 83 grams of carbon dioxide per kilometer (real-world driving on annual basis). As designed, the Kara could operate on just electric power – coming from a rechargeable lithium-ion battery -- for a zero-emission drive of 50 miles (80 km) max. Once the battery runs out of power, a 175 kW generator kicks in, with power derived from a 2.0 liter gasoline engine with direct-injection and turbocharging technology.

This allows the Karma to drive by 250 miles (403 km) more, bringing the total range to around 300 miles. Upon launch, the new Fisker Karma will have a Manufacturer's Suggested Retail Price (MSRP) of $95,900 -- before federal tax incentives of $7,500 – in the United States and a suggested retail price of €85,500.

At this price, the Karma will be able to compete against luxury sedans like the Mercedes-Benz S400 Hybrid, BMW 750i ActiveHybrid, Audi A8 TDI and Porsche Panamera S. It will also be a great value proposition against super sedans like the $200,000 Aston Martin Rapide and the $120,000 Maserati Quattroporte.

Topics: fisker, bankruptcy

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