SEC, DOJ Raise Objections To EV Maker Fisker's Bankruptcy Proceedings

Fisker Inc, an electric vehicle manufacturer, is under investigation by the US Securities and Exchange Commission and faces objections from the US Department of Justice over its Chapter 11 bankruptcy proceedings. The company filed for bankruptcy earlier this year after halting production in March. The SEC initiated a probe into Fisker's activities before its bankruptcy filing in June, focusing on potential violations of federal securities laws. The regulator has stressed the importance of Fisker preserving all relevant documents and records post-bankruptcy to ensure compliance with ongoing investigations. The DOJ has raised objections concerning Fisker's financial provisions for vehicle recall expenses, arguing that the proposed $750,000 cap on recall expenses is insufficient to cover both parts and labor costs required for vehicle repairs. The DOJ contends that this cap violates the National Traffic and Motor Vehicle Safety Act, which mandates that manufacturers remedy vehicle defects without charge. Fisker has issued five separate recalls for its vehicles, addressing issues ranging from defective door handles to faulty electric water pumps. The DOJ says that Fisker's current plan fails to meet its legal obligations to consumers by limiting funds available for recalls and not fully covering the costs associated with necessary repairs. The court is scheduled to address these objections during a hearing on October 9, and if the court sides with the SEC and DOJ, Fisker may be required to modify its bankruptcy plan to comply with regulatory demands.