Breaking News: DOJ Calls Fisker's Plan to Make Owners Pay for Recalls Illegal - What Does This Mean for Your Finances?
The U.S. Department of Justice has spoken out against bankrupt EV startup Fisker's proposal to make owners cover labor costs for multiple recalls, deeming it illegal. In a filing submitted to Fisker's bankruptcy docket, the DOJ, on behalf of the NHTSA, highlighted violations of the National Traffic and Motor Vehicle Safety Act. The agency's objection to Fisker's settlement plan, which aims to liquidate the remaining company assets, could impact the outcome of a scheduled hearing on Wednesday.
Amidst these legal battles, the SEC has launched an investigation into Fisker and raised concerns about the preservation of company records. Additionally, the landlord of Fisker's former headquarters has claimed that the company left the premises in disarray.
Fisker's initial decision to make owners pay for recall-related labor costs was quickly reversed, only to be reinstated later on. The company's settlement plan includes setting aside a limited amount for parts needed to address the recalls, but does not allocate funds for labor costs. However, the NHTSA argues that the division between parts and labor costs is legally irrelevant under the Safety Act, which requires manufacturers to cover all expenses related to recalls.
Furthermore, a section of Fisker's plan suggests potential reimbursement for labor costs, contingent upon the Fisker Owners Association receiving payment. The DOJ asserts that this arrangement also violates the Safety Act, as manufacturers, not vehicle owners, are responsible for remediation costs.
As some owners have already paid for recall repairs out of pocket, the DOJ supports their reimbursement, emphasizing that they should not have been burdened with these expenses. Overall, Fisker's legal battles and the DOJ's objections could have significant implications for the company's future and the financial interests of its stakeholders. Stay tuned for updates on this developing story.