Fisker has a major problem with sales of its Ocean SUV

A key dissident has threatened to ruin Fisker’s best chance to sell its unsold electric vehicles, a deal that would keep the startup’s bankruptcy proceedings alive and pave the way for the pack to repay creditors some of what they’re owed.

The objection to the sale came from the U.S. Trustee’s Office, the arm of the Justice Department that oversees the administration of bankruptcy, whose stated mission is to “promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders.”

But Fisker has plenty of support for the deal, which could be worth as much as $46.25 million and will see all Ocean SUVs destined for the North American market go to a company called American Lease, which serves ride-hail drivers in the New York City area.

A hearing is scheduled for Tuesday morning where both sides will present arguments before a Delaware Bankruptcy Court judge, who will likely decide whether to approve the sale.

Fisker’s support for the deal is broad. The company’s largest secured lender wants the deal to happen. The committee of unsecured creditors, which includes parties such as Fisker’s contract manufacturer Magna, who is owed money, also approves the sale. The newly formed Fisker Owners Association also wants the sale to happen — but on the condition that Fisker, American Lease and the secured lenders promise to make spare parts available and provide more clarity about how they plan to address the open recall regarding Ocean’s water pump.

Fisker says it needs the sale soon to provide a financial buffer that will keep the bankruptcy proceedings going while creditors fight over what’s left. The vehicle sale is also significant because the total scope of Fisker’s other assets — and what they might be worth — is still unclear. The company has claimed its net worth is between $500 million and $1 billion, but it has asked the court to delay the release of that information because it’s still being compiled.

The trustee’s office submitted a filing to the Delaware Bankruptcy Court last Thursday outlining reasons why the sale should not go through as expected.

The trustee’s office’s objection largely echoes concerns it has raised in hearings it has held to date. Its lawyers wrote that Fisker “provided no information” about whether it tried to tell other potential buyers about the fleet, how it marketed the sale, or how it valued the vehicles. It accused Fisker of “selling its fleet inventory to this buyer at fire prices without adequate marketing that would maximize value.” And it rebuked the company for rushing the sale, including scheduling an emergency hearing the day before the July 4 holiday.

Attorneys for the trustee’s office wrote that Fisker “has sought a hearing on the sale of its ‘crown jewel’ assets on one week’s notice during a federal holiday and is seeking a private sale to only one buyer without making any attempt to notify other potential buyers.”

Fisker’s lawyers, along with the startup’s chief restructuring officer John DiDonato, had already told the court in an emergency hearing that a hasty sale was needed to make payroll and continue bankruptcy proceedings. But after tough questioning from one of the U.S. trustee’s lawyers, DiDonato and Fisker’s lawyers took another look at the startup’s meager assets, were able to trim some costs — including founders Henrik Fisker and Geeta Gupta-Fisker reducing their salaries to $1 — and decided they could wait another week or two to give more input on the sale.

The trustee’s office in its objection also sought more information about why American Lease agreed on May 30 — before the bankruptcy — to buy 2,000 Oceans at a much higher average price, which would have netted Fisker a profit of about $40 million.

The only other entity to object to the sale by last Thursday’s 5 p.m. ET deadline was Ideal Motors, one of the dealer partners signed on by Fisker earlier this year. Ideal argues that it was not properly informed of the proposed sale, and said that “the pace here appears to be almost unprecedented.”

Despite the presence of another potential buyer — which was revealed at the most recent hearing on July 9 — the committee of unsecured creditors has said it now supports a sale to American Lease.

“The committee believes that [Ocean SUVs] was adequately marketed, that the highest and best offer for the Fleet Sales Agreement [Ocean SUVs] He [Fisker] “Whatever can be secured under the circumstances is reasonable and the sale transaction maximizes the value of the debtors’ estates for the benefit of all stakeholders,” committee lawyers wrote in a document filed Sunday.