After failing to make a $10 million loan payment to the government on Monday, sports car maker Fisker Automotive is one step closer to liquidation or bankruptcy reorganization. The company was supposed to begin paying down some of the $192 million it had borrowed under the Energy Department’s Advanced Technology Vehicles Manufacturing Loan Program.
The failed payment comes on the heels of the company losing a big chunk of cash. On April 11, the Energy Department “recouped the company’s approximately $21 million reserve account -- funds that came from the company's sales and investors, not our loan -– and will apply those funds to the loan.”
According someone familiar with the process, the feds basically cleaned out Fisker’s account and now must wait and see if the company can attract new investors or it is sold, the LA Times reported.
“Given the obvious difficulties the company is facing, we are taking strong and appropriate action on behalf of taxpayers,” said Energy Department representative Aoife McCarthy. “Using the safeguards we write into our loan agreements, the Department stopped disbursing on the loan in June 2011 after the company fell short of the aggressive milestones that we had established as a condition of the loan. As a result, while our original loan commitment was for $529 million, only $192 million was actually disbursed.”
Fisker laid off most of its workers earlier this month and still owes the government about $171 million. Fisker hired a bankruptcy law firm last month, a move that many believe probably signals the end of the Anaheim-based company. Henrik Fisker founded the business in 2007. Unfortunately, the auto-maker has not assembled a car in about nine months.