Fisker Inc. co-founders Henrik Fisker and his wife, Geeta Gupta-Fisker, have reduced their salaries to $1 to support their EV startup’s bankruptcy proceedings. This decision, made on July 8, follows scrutiny from a U.S. Trustee’s lawyer regarding their compensation. The company, founded in 2016, aims to fund its Chapter 11 case by selling its remaining inventory and implementing cost-saving measures.
Interest Rate Adjustments
Henrik and Geeta Fisker’s salary reduction is part of efforts to manage Fisker Inc.’s bankruptcy. The company paid them a minimum wage in 2022, plus cash bonuses, but their current pay is unclear. John DiDonato, Fisker Inc.’s restructuring officer, mentioned deferring severance payments, healthcare benefits, and sale incentive bonuses. Most of Fisker’s workforce has been reduced from 1,300 to about 130 employees.
Economic Perspectives
Fisker is negotiating to sell over 3,000 Ocean SUVs to American Lease for around $46.25 million. Despite a recall issue with the EV’s water pump, the deal progresses, with a final decision expected by July 16. Another potential buyer has shown interest, but details are under NDA. Brian Resnick, representing Fisker in the bankruptcy case, noted that upcoming weeks are crucial as they balance the sale to American Lease and other offers.
Banking Regulations
A dispute continues between Fisker’s lone secured creditor, Heights Capital Management, and unsecured lenders. Heights extended $500 million in loans to Fisker in 2023, later secured by all of Fisker’s assets due to a covenant breach. Unsecured creditors, owed around $1 billion, question Heights’ claims to be owed $180 million. The unsecured creditors’ committee found a new potential buyer, aiming to maximize value amid ongoing litigation.
