The Obama administration seized $21 million from the faltering electric car maker Fisker Automotive after it failed to make its first payment on $192 million in loan guarantees it received from the Energy Department.
On Monday, the Energy Department said it seized $21 million from Fisker’s reserve account on April 11. The government continues to seek repayment on a loan guarantee the company was awarded in 2009.
The pending loan payment and Fisker’s financial troubles fueled speculation that the company would file for bankruptcy today as it has hired a law firm with a large bankruptcy practice and a crisis management PR firm to manage a potential filing. However, the company has not yet filed for bankruptcy.
A recent report found that Fisker was losing $557,000 on each car it sold. The company spent $660,000 in taxpayer dollars and venture capital funds on each car it sold, and its luxury hybrid — the Fisker Karma — sold for $103,000.
The Obama administration allowed Fisker to continue to draw down on their $529 million loan even after violating the loan’s term multiple times, according to the report by the New York-based research firm PrivCo.
However, the Energy Department said the report was flawed and the department did the right thing by cutting off the loans.
“PrivCo’s assertion that Fisker defaulted in December 2010 is simply false,” said DOE spokesman Bill Gibbons. “The milestones that PrivCo includes in its report are also wrong. The fact is, the department stopped disbursements on the loan after the company stopped meeting its milestones.”
The automaker has faced many challenges this year, with the resignation of company founder Henrik Fisker and their poor luck finding new investors in China.
The Karma itself has caused them headaches as well. Last November, about sixteen Fisker vehicles parked in a New Jersey parking lot caught fire and “exploded” after being submerged in surging water from Hurricane Sandy.
Before that, two Fisker Karmas caught fire in Texas and California. Fisker recalled 1,400 Karmas already privately owned and another 1,000 unsold Karmas in the wake of the California fire — the third recall the company had issued in nine months.
However, Fisker did get promoted by some celebrities. Al Gore, Justin Bieber and Leonardo DiCaprio all sported the Karma.
The company also wielded significant political influence. The Gore-partnered venture capital firm Kleiner, Perkins, Caufield and Byers was a seed investor in Fisker and spent $400,000 in 2009 and 2010 on lobbying, including in favor of the stimulus package that handed out $90 billion for green energy programs.
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