The US Department of Justice (DOJ) has thrown a wrench into Fisker’s bankruptcy proceedings, filing objections to the EV maker’s liquidation plan. The DOJ, representing the National Highway Traffic Safety Administration (NHTSA), argues that Fisker cannot pass the cost of safety-related repairs onto customers.
The DOJ’s court filing, dated October 7, emphasizes that automakers are legally obligated to rectify any safety issues identified with their vehicles at no cost to the consumer. Fisker has acknowledged five safety-related issues, three of which were addressed via over-the-air software updates. However, the remaining two issues require physical repairs. The proposed liquidation plan, according to the DOJ, unfairly places the burden of covering labor expenses for these physical repairs on the vehicle owners. While the plan suggests future reimbursement, the DOJ argues that this approach violates the provisions of the National Traffic and Motor Vehicle Safety Act.
This objection comes on the heels of similar concerns raised by the US Securities and Exchange Commission (SEC). The SEC, also expressing apprehension about Fisker’s liquidation plan, highlighted its ongoing police and regulatory interest in the company’s books and records. The SEC pointed out that the plan lacks clarity regarding which books and records will be transferred to whom, potentially hindering future investigations.
Fisker’s bankruptcy filing in June followed a period of significant cash burn as the company sought to scale production and sales of its Ocean SUV. Since then, Fisker has sold off a majority of its electric vehicle fleet. The company’s proposed liquidation plan, aimed at resolving its financial troubles, faces growing opposition from both safety and regulatory bodies.
The DOJ’s objection adds further complexity to Fisker’s already challenging situation. The company now faces the task of addressing these concerns and revising its liquidation plan to address the legal and regulatory requirements surrounding safety and transparency.
