\n<\/p>\n
Fisker is just a few days into its Chapter 11 bankruptcy, and the fight over its assets is already charged, with one lawyer claiming the startup has been liquidating assets \u201coutside the court\u2019s supervision.\u201d<\/p>\n
At issue is the relationship between Fisker and its largest secured lender, Heights Capital Management, an affiliate of financial services company Susquehanna International Group. Heights loaned Fisker more than $500 million in 2023 (with the option to convert that debt to stock in the startup) at a time when the company\u2019s financial distress was looming<\/a> behind the scenes. <\/p>\n That funding was not originally secured by any assets. That changed after Fisker breached one of the covenants when it failed to file its third-quarter financial statements on time in late 2023. In exchange for waiving that breach, Fisker agreed to give Heights first-priority on all of its current and future assets, giving Heights considerable leverage. Heights not only gained pole position to determine what happens to the assets in the Chapter 11 proceedings, but also gave them the chance to tap a preferred restructuring officer to oversee the company\u2019s slow descent into bankruptcy.<\/p>\n Alex Lees, a lawyer from the firm Milbank who represents a group of unsecured creditors owed more than $600 million, said in the proceeding\u2019s first hearing on Friday that it took \u201ctoo long\u201d to get to this point. He said Fisker\u2019s tardy regulatory filing was a \u201cminor technical default\u201d that somehow led to the startup \u201cbasically hand[ing] the whole business over to Heights.\u201d<\/p>\n \u201cWe believe this was a terrible deal for [Fisker] and its creditors,\u201d Lees said at the hearing. \u201cThe right thing to do would have been to file for bankruptcy months ago.\u201d In the meantime, he said, Fisker has been \u201cliquidating outside the court\u2019s supervision\u201d for the benefit of Heights in what he said amounts to \u201csuspect activity.\u201d Fisker has spent the run-up to the bankruptcy filing slashing prices<\/a> and selling off vehicles.<\/p>\n Scott Greissman, a lawyer representing the investment arm of Heights, said Lees\u2019 comments were \u201ccompletely inappropriate, completely unsupported,\u201d and derided them as \u201cdesigned as sound bites\u201d meant to be picked up by the media.<\/p>\n \u201cThere may be a lot of disappointed creditors\u201d in this case, Greissman said, \u201cnone more so than Heights.\u201d He said Heights extended \u201can enormous amount of credit\u201d to Fisker. He added later that even if Fisker is able to sell its entire remaining inventory \u2014 around 4,300 Ocean SUVs \u2014 such a sale \u201cwill maybe pay off a fraction of Heights\u2019 secured debt,\u201d which currently sits at more than $180 million. <\/p>\n