💥Most Telegraphed Chapter7 in History💥
Updates: Fisker Inc., Rite-Aid, Takeoff. One Table + Midwest Christian File.
⚡Update: Fisker Inc.⚡
We’re back with an update on Henrik Fisker’s second failed attempt at an electric vehicle company. We previously covered the Fisker Inc. chapter 11 first day hearing here:
The cases are supposed to be a “simple” liquidation powered from week to week by the use of cash collateral. And from the petition date to the second day hearing (~1 month), there have been three interim cash collateral orders. These were intended to bridge the Fisker debtors towards a vehicle fleet sale, which happened to be the key issue on the agenda for the second day hearing on July 16, 2024 (as well as a fourth cash collateral motion).
But before we get to that, we need to talk about pre-petition secured lender, CVI Investments Inc (“CVI”), managed by Heights Capital Management (“Heights”). You see, as secured lender, Heights has been the one granting permission for the use of its cash collateral. BUT Heights has also expressed an interest in converting these cases to chapter 7. Here’s a limited objection to certain first day motions from Heights:
“These cases are fragile and the situation is fluid. CVI respectfully files this Limited Omnibus Objection and requests that the Court deny the final relief sought without prejudice or, alternatively, further adjourn the hearings on the Selected First Day Motions to a later date, after it is determined whether the Debtors will remain in chapter 11 or convert to chapter 7 and/or so that the relief sought may be adjusted as circumstances warrant and as the situation develops.”
However it also seems Heights is completely supportive of the fleet sale motion. Here’s Davis Polk & Wardwell LLP’s Brain Resnick, counsel to Fisker, during the second day hearing:
“Our secured lender has been supportive and is supportive of the sale today. And as we’ll get into the details with the sale, our hope and expectation is that, unless something unexpected happens, we would hope and expect that cash collateral will be extended to the 29th.”
Soooo good news, the fleet sale gets done, cash collateral is extended, and no more pushing for chapter 7 right?? Haha, nope. Heights wants to have its cake and eat it too.