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The fight over Fisker's assets is already heating up | TechCrunch

The fight over Fisker's assets is already heating up | TechCrunch

Fisker is just days away from filing for Chapter 11 bankruptcy, and its assets have already been charged with fighting, with one lawyer claiming the startup is liquidating assets “outside of court oversight.” Is.

At issue is the relationship between Fisker and its largest secured creditor, Heights Capital Management, an affiliate of financial services company Susquehanna International Group. Heights loaned Fisker more than $500 million in 2023 (with an option to convert the loan into stock in the startup) at a time when The financial problems of the company were increasing. Behind the scenes.

That funding was not originally secured by any assets. The change came after Fisker breached a covenant in late 2023 when it failed to file its third-quarter financial statements on time. Giving the elevations a considerable advantage. Heights won the pole position not only to determine what happens to assets in a Chapter 11 proceeding, but also to tap a preferred restructuring officer to oversee the company's slow descent into bankruptcy. It also provided an opportunity.

Alex Lees, an attorney with the firm Milbank representing a group of unsecured creditors who are owed more than $600 million, said at the first hearing in the proceeding in Delaware bankruptcy court on Friday that reaching this point It felt “too long”. He said Fisker's late regulatory filing was a “minor technical default” that somehow led the startup to “basically take the whole business to the next level.”

“We believe this was a terrible deal for (Fisker) and its creditors,” Lees said at the hearing. “The right thing to do would have been to file for bankruptcy months ago.” In the meantime, he said, Fisker is “stepping out of court supervision” for the benefit of Heights in what he said is “suspicious activity.” Fisker has spent the run-up to the bankruptcy filing. Price drop And selling vehicles.

Scott Grisman, an attorney who represents Heights' investment arm, said Lease's comments were “totally inappropriate, totally unsupported” and derided them as “sound bites.” Designed” meant to be picked up by the media.

“There could be a lot of desperate creditors” in this case, Grisman said, “none more so than the Heights.” Heights gave Fisker “too much credit,” he said. He later added that even if Fisker is able to sell its entire remaining inventory — about 4,300 Oceania SUVs — such a sale would “probably pay off a portion of Heights' secured debt,” which currently stands at $180 million. More than a million.

Lawyers told the court on Friday That they have an agreement in principle to sell the Ocean SUV to an undisclosed vehicle leasing company. But it was not immediately clear what other assets Fisker might sell to provide returns to other creditors. The company claims it has between $500 million and $1 billion in assets, but the filing so far only includes detailed manufacturing equipment, including 180 assembly robots, a full underbody line, a paint shop and other specials. Appliances included.

Lees was not alone in his concern about how Fisker had filed for bankruptcy. “I don't know why it's taking so long,” Linda Richenderfer, an attorney with the U.S. Trustee's office, said during the hearing. She also noted that she was reviewing new filings late Thursday and in the hours before the hearing.

He also expressed “significant concern” that the case could turn straight into a Chapter 7 liquidation after the sale of Ocean's inventory, leaving other creditors fighting for scrap.

Greissman said at one point that he agreed that it “probably took longer” for Fisker to file for bankruptcy protection, and that some of these disputes would have been “more likely” if the case had started sooner. could easily be solved”. He even said he agreed with Richenderfer that “even with the sale of the fleet, Chapter 11 may not be sustainable.”

The parties will meet again for the next hearing on June 27.

Before he dismissed everyone, Judge Thomas Horan thanked all parties involved in the hearing “so neatly” despite the rush of filings this week. He specifically called on the US trustee's office to work under “really difficult circumstances” to “get a head start” on the matter with “in the scheme of things, minimal controversy.”

“I imagine there are some people who want to get some sleep now,” he said with a smile, as he finished the hearing.

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