Fisker Stock Plummets 10%: Heights Capital Management Pushes for Chapter 7 Bankruptcy
In a dramatic turn of events, Fisker’s stock has dropped by 10% today, leading to a staggering year-to-date loss of 99.78%. The bankrupt company is now embroiled in a battle over who will receive the proceeds from its liquidation.
Heights Capital Management, Fisker’s sole secured lender, claims it is owed $180 million and is pushing for the bankruptcy case to be converted to a Chapter 7. This move would allow Fisker to liquidate its assets and provide Heights with payment, potentially spelling the end for the struggling company.
However, Fisker is fighting back, advocating for a Chapter 11 bankruptcy instead. This option would give Fisker a chance at survival and allow it to continue operating under court supervision with the goal of reorganization.
The Department of Justice and the National Highway Traffic Safety Administration have also weighed in, supporting Fisker’s stance on Chapter 11. They argue that a Chapter 7 bankruptcy could harm consumers with recalled vehicles and disrupt Fisker’s operations.
As the battle rages on, Fisker and Heights have agreed to spend the next three weeks trying to reach a settlement. The outcome of this decision could determine whether the bankruptcy proceeds as a Chapter 11 or is converted to a Chapter 7.
In conclusion, this ongoing saga highlights the complex nature of bankruptcy proceedings and the impact they can have on investors, consumers, and the company itself. It serves as a cautionary tale for those involved in the financial markets, reminding us of the risks and challenges that come with investing in troubled companies.