Fisker Inc.’s restructuring officer,(Salary)John DiDonato, stated in a Tuesday morning filing that the couple, who co-founded the startup in 2016, decided on July 8. This move came just five days after Linda Richenderfer questioned DiDonato. A lawyer for the office of the U.S. Trustee about the Fiskers’ continued payroll presence.
July 3 Hearing Highlights
During the July 3 hearing, Richenderfer inquired about the Fiskers’ payroll status. She wanted to ensure the company had exhausted all options before requesting court approval for an expedited sale of Fisker’s EVs to fund the rest of the Chapter 11 case. These funds are intended to cover legal proceedings and the company’s wind-down.
Salary Details
DiDonato struggled to recall Henrik and Geeta’s current salaries but mentioned their wages were “undertaking a modification” and possibly “some deferrals.” What they were being paid as the company slid into bankruptcy is unclear. In 2022, the company reported paying them a minimum-wage salary of $62,400 in California, plus cash bonuses of $710,000 each.
Cost-Saving Measures
In addition to salary reductions, DiDonato’s Tuesday filing mentioned deferring “certain severance payments, certain employee healthcare benefits, and vehicle sale incentive bonuses.” Fisker’s workforce has dwindled from around 1,300 in September 2023 to about 130.
Sale to American Lease
Fisker aims to sell over 3,000 of its remaining Ocean SUVs to American Lease, a New York-area company serving ride-hail drivers, in a deal valued at around $46.25 million. Another potential buyer has also shown interest, but details remain confidential.
Vehicle Issues
The plan involves selling about 200 Oceans to American Lease at a time due to a water pump issue that can cause the high-voltage battery to lose power. Fisker needs to fix this problem, which is under recall by the National Highway Traffic Safety Administration, on every car before sale.
Funding the Case
Fisker believes it can fund the case for the next few weeks. The outlined cost-saving measures, additional cash from prior vehicle auctions, and bank account interest. A final decision on the American Lease sale is expected on July 16.
Ongoing Legal Battles
The ongoing conflict between Fisker’s lone secured creditor, Heights Capital Management, and its unsecured lenders continues. A committee of unsecured creditors was recently formed, and their legal representation voiced concerns at the latest hearing.
Unsecured Creditors’ Concerns
Doug Mannal of Morrison Foerster LLP represents the unsecured creditors. The creditors expressed discomfort with how Heights Capital Management ended up first in line for Fisker’s assets. He accused Heights of using Fisker as a “money tree” and questioned. They claim over $180 million, while unsecured creditors owe around $1 billion.
Heights’ Defense
Scott Greissman, representing Heights, stated that the firm acted within the contractual agreements with Fisker. He emphasized that Heights sees Fisker’s situation as a liquidation, stressing that “every dollar expended is unrecoverable.”
Future Prospects
While the next few weeks remain uncertain, both sides continue to prepare for the potential outcomes of the bankruptcy proceedings. The committee of unsecured creditors actively seeks to enhance the value of Fisker’s remaining assets, having already identified a new potential buyer.
