Fisker Automotive missed a payment on its loan from the Department of Energy on Monday, but the DOE said yesterday it seized $21 million from the company’s account 12 days ago in anticipation of a default.
“Given the obvious difficulties the company is facing, we are taking strong and appropriate action on behalf of taxpayers,” the Energy Department said in a statement, according to the Wall Street Journal. The DOE “recouped the company’s approximately $21 million reserve account — funds that came from the company’s sales and investors, not our loan — and will apply those funds to the loan.”
An agency official confirmed to Bloomberg that the payment wasn’t made Monday.
Fisker, the maker of the Karma luxury hybrid, owes $192 million on a green car loan, but the company laid off most of its workforce earlier this month and has hired restructuring lawyers to prepare for bankruptcy.
The company spent $660,000 on each hybrid it made, according to a report last week by PrivCo, a researcher that focuses on private companies. PrivCo based its estimate on the $1.3 billion Fisker spent, divided by approximately 2,200 Karmas produced.
“Fisker Automotive will go down as the largest venture capital-backed debacle in U.S. history, with over $1.3 billion lost,” said PrivCo CEO Sam Hamadeh in a statement.
The DOE took issue with PrivCo reporting that it knew Fisker wasn’t meeting the conditions of its loan in December 2010, even though the it didn’t halt the loan until June 2011, a spokesman told Bloomberg.“PrivCo’s assertion that Fisker defaulted in December 2010 is simply false,” spokesman Bill Gibbons said. “The milestones that PrivCo includes in its report are also wrong. The fact is, the department stopped disbursements on the loan after the company stopped meeting its milestones.”
The report does raise further questions about Fisker, said Rep. Jim Jordan, R-Ohio. Jordan is the chairman of the House Oversight and Government Reform subcommittee that will hold a hearing on the company’s loan on Wednesday.
“PrivCo’s report raises more questions as to the circumstances surrounding government support for Fisker,” he said in a statement, according to Bloomberg.
Fisker founder Henrik Fisker will testify at Wednesday’s hearing, along with COO Bernhard Koehler and Nicholas Whitcombe, a supervisory senior investment officer with the DOE’s loan programs office. CEO Tony Posawatz has also been invited.