Fisker’s plan to liquidate its assets has been accepted by the bankruptcy court in Delaware. And with it, the issue of who should pay for labor costs associated with a pair of recalls on the bankrupt EV startup’s SUVs is finally settled.
Fisker has also reached a deal with American Lease, the buyer of its remaining EV fleet, to resolve a problem regarding the cloud-hosted data that is required to operate the vehicles.
The court’s acceptance of the plan brings the four-month process of Fisker’s bankruptcy mostly to a close. And it gives a green light to a newly-appointed trustee to oversee the sale of around $ 1 billion in assets, including the manufacturing equipment that was used to build Fisker’s electric SUVs. The plan also lays out all the details about how much money Fisker’s myriad creditors will receive from the sale of those assets.
But the plan also wraps up loose ends, including the issue of who will pay for the labor costs associated with two recalls. Fisker actually has five outstanding recalls on its Ocean SUVs. Three can be resolved with a software update, but two of them require replacement parts.
Fisker initially said it would cover the cost of the parts but not the labor when it published a FAQ about the recalls in mid-September. It quickly reversed course and said it would cover the labor costs. But then it reversed again in late September, putting the financial burden back on the owners.
The DOJ said last week that this approach was illegal, because it violated the National Traffic and Motor Vehicle Safety Act. So Fisker and its bankruptcy lawyers had to devise a new approach as it worked to finish off its liquidation plan.
Now, any owner getting the two recalls addressed before the liquidation plan is considered to be in effect — which should be this week — will still have to pay up front for labor costs. They will then have to submit a reimbursement claim to the trustee overseeing Fisker’s liquidation. Anyone who has already paid for the labor to fix these recalls also falls into this bucket.
Anyone who gets the recalls fixed after the plan’s effective date can to go to an authorized service center and get the repairs done without paying for labor. Those service centers will then have to make their own reimbursement claims with the liquidation trustee.
Fisker has also resolved a surprising last-minute issue with American Lease, the New York-based leasing company that bought the startup’s remaining fleet of around 3,000 Ocean SUVs for $ 46.25 million. American Lease filed an emergency objection to the liquidation plan last week because, it said, Fisker had discovered it was unable to move data crucial to operating its EVs on to a new server.
American Lease agreed to pay an additional $ 2.5 million over the next five years to take control of the cloud services that keep the Ocean SUVs online. Additionally, the Fisker Owners Association will get access to this data, along with other support services that will help existing owners in the years to come.
