2012 Fisker KarmaEnlarge Photo
It's the news we've been expecting for over a year now: Fisker Automotive filed late Friday afternoon for Chapter 11 bankruptcy protection.
The range-extended electric car company has lain dormant for months now, while a frenzy of activity behind the scenes tried to secure its future at the hands of an overseas buyer.
While bankruptcy sounds like an unfortunate conclusion, it could still be the start of something bigger for Fisker, reports Automotive News.
That's because Hong Kong-based Hybrid Technology Holdings LLC, the company buying Fisker's assets, will provide $8 million in debtor-in-possession financing, to fund the company's sale and restructuring.
Hybrid Technology has also bought the U.S. Department of Energy's loan in Fisker for $25 million. While Fisker remains one of the green-technology loan program's failure stories, it does mean the DoE has now recouped around $53 million of its original $192 million investment, according to Reuters.
It was those loans putting off several other potential buyers, but the company's bankruptcy and the loan buyout now means a fresh start for the embattled company.
While there's much still to decide--the company is "making decisions about the structure and footprint of the new business", said a spokeswoman--the loan purchase is the first step toward eventually restarting production and sale of the Karma.
Fisker's range-extended electric Karma has now been out of production for 18 months, following a torrid few years for the company.
Originally beset by delays, the Karma was widely praised for its styling and performance at launch, but less so its build quality and reliability. Despite celebrity endorsement from the likes of actor Leonardo di Caprio and Canadian popstar/screaming-tween-magnet Justin Bieber, the company then suffered further issues.
Production stalled when battery maker A123 filed for bankruptcy, then dozens of cars were destroyed by fire following the inundation of a port during super storm Sandy. Fisker's insurer then refused to pay out, Henrik Fisker himself left the company, and earlier this year Fisker fired three quarters of its employees to save cash.
All the while, Fisker struggled to find a buyer--so despite first appearances, bankruptcy has a positive outlook for the business.
We may yet see Karma production return--as well as other models touted before its tribulations.