We advised Fisker in connection with its chapter 11 cases

Davis Polk served as lead counsel to Fisker Inc. and certain of its affiliates (collectively, “Fisker” or the “debtors”) in connection with their chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware. On October 11, 2024, following a contested confirmation hearing before Judge Thomas M. Horan, the Bankruptcy Court ruled that it would confirm the debtors’ chapter 11 plan (including approving, over the objection of the United States Trustee, third-party releases for creditors that did not opt out).  Confirmation of the plan, which was supported by the overwhelming majority of creditors, was achieved less than two months after the debtors reached a settlement agreement with CVI Investments, Inc. (Fisker’s sole senior secured lender), the official committee of unsecured creditors, and Magna International, Inc. that resolved CVI’s motion to convert the debtors’ chapter 11 cases to cases under chapter 7 of the Bankruptcy Code. On October 16, 2024, the Bankruptcy Court entered an order approving the company’s combined disclosure statement and plan of liquidation. The plan subsequently went effective on October 17, 2024.

The debtors’ chapter 11 plan is largely funded with up to $46.5 million of proceeds from a fleet sale, during the chapter 11 cases, of Fisker’s remaining vehicle fleet of approximately 3,300 vehicles to American Lease LLC, the largest lessor of rideshare vehicles in the New York metropolitan area. Through extensive negotiations, the debtors and their advisers were successfully able to reach consensus among various case constituencies with competing interests; they formulated a plan that avoided conversion to chapter 7, maximizes recoveries and provides a framework for an orderly liquidation of Fisker’s business and assets. The plan provides for the establishment of two trusts, with one trust receiving the debtors’ intellectual property rights and claims against foreign subsidiaries, the proceeds of which are weighted in favor of CVI, and the other trust receiving estate claims and certain other non-intellectual property assets, the proceeds of which are weighted in favor of general unsecured creditors.

In addition, as a result of extensive negotiations and discussions between the debtors and the National Highway Traffic Safety Administration, the plan contemplates that the debtors’ recall-related remediation efforts will continue following the effective date of the plan.  Critically, a settlement agreement reached with American Lease on the eve of confirmation, with the support of the Fisker Owners Association, contemplates (i) the grant of a non-exclusive license of certain of the debtors’ intellectual property to American Lease and (ii) American Lease funding and operating the Fisker cloud for a five-year period commencing on January 1, 2025, ensuring that existing Fisker owners will be able to remain connected to and receive updates from the Fisker cloud for that five-year period.

Fisker was an American automotive company that designed, developed, marketed and sold electric vehicles. Formerly headquartered in California, Fisker operated in several countries (including the United States, Austria, Germany, China and India) and conducted sales operations in North America and throughout Europe.

The Davis Polk restructuring team included partners Brian M. Resnick and Darren S. Klein and associates Richard J. Steinberg, Amber Leary and Kevin L. Winiarski. The litigation team included partner James I. McClammy and associates Nicholas D’Angelo and James C. Butler. Partners Frank Azzopardi and Pritesh P. Shah and counsel Mikaela Dealissia provided intellectual property advice. Partner Robert F. Smith provided finance advice. Partners Michael Kaplan and Michael Davis provided corporate advice. Partner Corey M. Goodman and counsel Tracy L. Matlock provided tax advice. All members of the Davis Polk team are based in the New York office.

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