Fisker settles suit with insurance company – precursor to a sale?

The carmaker filed suit in December, after the insurer refused to cover the loss of 338 Karma sedans, worth about $33 million, that were destroyed in Superstorm Sandy.

 

Fisker has settled its lawsuit against XL Insurance, Bloomberg reported this week. The carmaker filed suit in December, after the insurer refused to cover the loss of 338 Karma sedans, worth about $33 million, that were destroyed in Superstorm Sandy. “Fisker Automotive and XL Insurance America Inc. can confirm that they were able to successfully reach an out-of- court agreement that resolves their coverage dispute,” said a Fisker spokesman. “The terms of the settlement are confidential.”

John Voelcker of Green Car Reports speculated that Fisker may be cleaning up loose ends in preparation for a sale of the company, or at least an infusion of cash from a new partner or investor. The Wall Street Journal reported in January that the careworn company has set a goal of securing a deal to ensure its future by the end of February.

Chinese firms Dongfeng, Geely (which owns Volvo) and Wanxiang are said to be among potential suitors, which has a couple of US lawmakers seeing red, so to speak. Senators Chuck Grassley (R-IA) and John Thune (R-SD) oppose any sale to a Chinese company. “Technology developed with American taxpayer subsidies should not be sold off to China,” Grassley told Bloomberg, citing the case of battery maker A123, another recipient of DOE subsidies that went into bankruptcy, and was recently snapped up by Wanxiang at a bargain price.

The DOE granted Fisker $529 million in loans in 2009, but cut the company off in 2011 after about $193 million had been disbursed.

 

Image: Fisker
Sources: The Wall Street Journal, Bloomberg, Green Car Reports