Approved Bankruptcy Plan Maintains Warranty Servicing and Over-the-Air Updates for Fisker Vehicles' Operations
In a surprising turn of events, electric vehicle manufacturer Fisker Inc. has filed for bankruptcy, marking the end of its operations for now. The filing, approved by U.S. Bankruptcy Court Judge Thomas Horan, was part of a restructuring effort to address persistent technical issues and financial challenges.
Fisker's flagship vehicle, the Ocean SUV, was seen as a competitor to Tesla's Model Y. However, software glitches and other technical problems hampered its success, leading to production and delivery issues that eventually drained the company's funds.
The bankruptcy proceedings involve a standard Chapter 11 restructuring, without any known or reported legal claims against its officials for fiduciary duty violations or securities law infractions at this time. The relevant bankruptcy proceedings appear limited to reorganization matters handled by the Delaware bankruptcy court, without documented shareholder derivative suits or securities class actions as of August 2025.
Despite raising $1 billion in equity capital through a special purpose acquisition company (SPAC) in 2020, Fisker's inability to secure strategic investment or find a buyer led to its bankruptcy filing, with estimated liabilities up to $500 million.
The bankruptcy plan allows Fisker car owners to continue using their vehicles, but does not offer compensation to shareholders. The estate will cover the expenses of addressing malfunctioning brakes and a defective water pump for the Ocean SUV.
Fisker's assets, including intellectual property and vehicles, are expected to be sold. American Lease, a New York-based company, has purchased Fisker's remaining inventory of over 3,000 cars and agreed to provide cloud access for these software updates for five years. Proceeds from these sales will primarily go to secured creditors, including CVI Investments, which holds a claim of over $180 million.
Meanwhile, legal proceedings are underway, with over 1,300 individual arbitration demands against J.P. Morgan Chase Bank. The SEC has also demanded that Fisker preserve all company records as part of its investigation into potential securities violations.
Shareholders have not been compensated under the bankruptcy plan, and Fisker's co-founders Henrik Fisker and Geeta Gupta-Fisker, along with other officials, are facing shareholder lawsuits. The lawsuits allege violations of fiduciary duties and securities laws, with claims that Henrik Fisker made optimistic statements about the company's prospects while its financial situation worsened.
The Manhattan Beach office has been abandoned, with garbage and hazardous waste left behind. A job listing for a Sr. Manager, Financial Planning & Analysis was posted in Manhattan Beach, CA, one week ago, suggesting that the company may be preparing for a new phase.
Car owners may pursue other avenues for recouping losses, such as arbitration cases against financial institutions involved with Fisker. The bankruptcy plan does not offer a clear path for shareholders to recover their investments.
As the situation unfolds, it remains to be seen how Fisker will emerge from bankruptcy and whether it can regain its footing in the competitive electric vehicle market.
[1] BankruptcyData.com, "Fisker Inc. Chapter 11 Filing," [accessed August 2025]. [2] Reuters, "Fisker Files for Bankruptcy as Electric Car Startup Struggles," [accessed August 2025]. [3] Law360, "Fisker's Bankruptcy Plan Approved," [accessed August 2025]. [4] Bloomberg, "Fisker's Bankruptcy Leaves Owners in the Lurch," [accessed August 2025].
- The financial troubles that led to Fisker Inc.'s bankruptcy filing were a result of persistent technical issues and challenges in securing strategic investment in the competitive business of electric vehicle manufacturing.
- As part of the bankruptcy proceedings, Fisker's assets, including intellectual property and vehicles, are set to be sold, while legal proceedings against its officials, including shareholder lawsuits and SEC investigations into potential securities violations, are underway.
