This week Fisker Automotive, the California-based maker of the Karma hired restructuring lawyers at Kirkland & Ellis LLP to begin exploring potential bankruptcy protection.
Needing cash, having not produced a Karma since last July, unable to find a suitable partner or investor, and with an April 22 loan payment looming, Fisker is considering the possibility and needs to know what its options are.
The company also recently furloughed 200 U.S. workers to save money, and it is on the hook for an undisclosed payment on about $192 million in debt under the Energy Department’s Advanced Technology Vehicles Manufacturing Loan Program.
Fisker has played down the furloughs as a normal business procedure and has not divulged the amount of payment due next month.
The Energy Department secured the loan with Fisker’s equipment and property, and in the event of a bankruptcy by Fisker, it could be put in control of the company
According to the Wall Street Journal which first reported the bankruptcy contingency plan, an Energy Department representative has said it “is committed to the best outcome for taxpayers.”
Previously the Energy Department retained Houlihan Lokey Inc., an investment bank, to track Fisker’s efforts to raise funds.
Fisker in turn had previously used the services of Evercore Partners to help it find potential investors, and it has hired Huron Consulting Group to help with management of daily operations while it negotiates. A Huron employee serves as Fisker’s chief administration officer.
Comments from Fisker and the attorney handling the potential bankruptcy for Kikland & Ellis were not immediately available upon filing this story.