Fisker Files For Chapter 11 Bankruptcy
What do Justin Bieber, Ashton Kutcher and Al Gore all have in common? They may soon — baring a miracle — become the proud owners of the first orphan cars made in the 21st century for well-moneyed consumers by an automaker born in the 21st century, as Fisker Automotive has filed for Chapter 11 bankruptcy protection.
Unlike Chapter 7, where everything is liquidated and everyone is laid off forever ( an experience this writer has gone through herself with her last full-time employer), Chapter 11 will allow Fisker to attempt to get it together through reorganization with Richard Li of Hybrid Tech Holdings, LLC at the helm. Li purchased Fisker in a United States government auction last month for $25 million.
As for who this bankruptcy filing affects, look no further than your wallet: Fisker Automotive was one of a few automakers who took out a loan from the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing program. The total note was $529 million, though Fisker only took $192 million from the government while also taking $525 million from private investors. While the DOE recouped $28 million from the automaker’s first missed payment, the government (and thus, the taxpayer) lost $139 million on the investment.
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