It seems like its been a long time in coming, but Fisker Automotive has finally declared Chapter 11 Bankruptcy.
After taking out $192 million in US Department of Energy [DOE] loans and better than $500 million from private investors, Fisker Automotive had a very difficult time getting on a roll. The Fisker Karma, and future proposed models, had what seemed to be solid technology backing. A series of unfortunate events, the failure of advanced lithium-ion battery supplier A123 Systems, as well as some poor financial decisions, eventually led to the company defaulting on its DOE loan payments.
Fisker Automotive’s DOE loan was auctioned off, and it seemed that a number of companies and investors were interested in the company, such as Wanxiang Group, who had previously acquired A123 Systems, among others. Eventually, the winning bid went to Richard Li, an investor from Hong Kong, for a bargain $25 million. The DOE took a hit on loan, Americans losing $139 million on the deal.
Fisker Automotive isn’t out of the woods yet though, and has just filed for Chapter 11 Bankruptcy. This will allow new owner Richard Li to attempt a reorganization to keep the company from failing completely. Considering that the company hasn’t made a single vehicle in more than a year, Mr. Li has some serious work ahead of him. He may have some help from former founder and CEO, Henrik Fisker, who has expressed interest in gaining control of his former company, but no news yet on his involvement, if any.