Fisker Inc. asked the bankruptcy judge overseeing its case to green-light its high-volume sale to a car-leasing company.
According to a new filing with the U.S. Bankruptcy Court for the District of Delaware, the automaker is seeking to bulk sell the remainder of its inventory to a single leasing company. If the sale goes through, New York firm American Lease LLC will pick up some 3,231 Ocean SUVs for its ride-share fleet.
American Lease agreed to pay between $2,500 and $16,500 for each vehicle, depending on its condition. On average, the total $46.25 million sum works out to about $14,400 per vehicle, though Fisker says it has 2,711 vehicles in “Good Working Order” that will go for that top-end $16,500 price. Previously titled cars Fisker has in its inventory, on the other hand, will go for $3,200, while most damaged vehicles that need cosmetic or mechanical repairs will go for $2,500.
And yes, in case you’re wondering, that is a dramatic fall from the car’s original MSRP, and even what the company asked when it slashed prices to try and queue up sales before it finally declared bankruptcy. An Ocean Extreme — the highest model in the lineup — originally commanded a price tag of at least $61,499, and in some cases more than $70,000 when fully optioned out. Fisker cut prices by up to $24,000 back in March, but it wasn’t enough to save the company, and it filed for Chapter 11 bankruptcy protection last month.
There are more worrying parts of Fisker’s filing
In the July 2 motion, Fisker said it will not be able to fund vital business expenses such as payroll, taxes, and software provider costs if the court does not approve the sale by July 12.
Fisker also, at least indirectly, answered a lingering question of what the company plans to do as far as warranty claims and repairs for cars that are already on the road. For the purposes of the sale to American Lease, the company says that, “Buyer shall be solely responsible for all costs of warranty repairs, including parts and labor, of the Vehicles.” It further said it will have “no obligation” of repair or maintenance of the vehicles, meaning they’ll be sold in “as-is” condition, despite most of the vehicles being brand-new.
That sense of Fisker washing its hands of these vehicles also extends to its software. The company says in the agreement that it again has no obligation to update its vehicles beyond software version 2.1. However, it also says it will provide American Lease with the “relevant source code or other proprietary software operating elements”, addressing the need for software updates beyond Fisker selling these vehicles to the leasing firm. They also included the possibility of “post-transaction software improvements to the Vehicles”, opening the door for American Lease to potentially make its own changes to the Ocean’s software to either fix issues that crop up or make its own updates, at the company’s own cost. That said, while Fisker said the software license is royalty-free, it is not exclusive, so we could see the Ocean’s code base end up elsewhere in time.
For the moment, Fisker Inc. has no official comment on what’s happening beyond the filing itself. While this does not specifically mention after-sales support like warranty repairs for any vehicles outside this specific deal, the fact that Fisker claims it will not make payroll without this transaction suggests owners could be left in the lurch (especially long-term) if something goes wrong outside the existing recalls.
As ever, we will have to wait and see what other developments come of Fisker’s bankruptcy. As part of this bulk deal, American Lease cannot sell these vehicles for a minimum of twelve months after the deal goes through. I wonder, though, whether we’ll see hundreds or thousands of insanely cheap, second-hand Oceans hit the market when American Lease is no longer bound to hang onto the vehicles.
