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Energy Department selling off Fisker's bad loan

Without any buyers, the government will try selling the plug-in hybrid automaker's remaining $164 million debt.

By Clifford Atiyeh Sep 18, 2013 8:00AM
The Energy Department, citing defeat from its controversial loan to Fisker Automotive, is auctioning the bankrupt company's remaining $164 million in unpaid debt.

According to loan director Peter Davidson, the department will try to sell the remaining debt for the "best possible recovery for the taxpayer," although Davidson did not specify what parties would be interested or when the sale would occur. A complete sale may not be possible.

Davidson said the department has recovered $28 million from Fisker's bank accounts to pay back its $192 million total withdrawal. In April, just days after Fisker missed a $10 million loan payment, the department forced a $21 million withdrawal from Fisker's reserve account.
Both the Energy Department and Fisker, which defaulted on $192 million of a $529 million loan, came under congressional scrutiny in April when reports revealed that the department knew about Fisker's financial trouble at least a year prior to freezing the remainder of the automaker's loan in June 2011. Former loan director Jonathan Silver, a venture capitalist who quit in October 2011 after the Solyndra bankruptcy and that solar company's connections to the Obama administration, had also violated the Federal Records Act by using personal emails to purposely keep internal business discussions off the record, according to the House Oversight Committee.

The first Karma was delivered in late 2011, and just 2,000 of the company's $103,000 plug-in hybrid sedans have been sold. No other hearings have been held on Fisker or the Energy Department's handling of auto loans.

Vice President Joe Biden had promised Fisker would create 2,000 jobs at a former GM auto plant in Delaware, but the company -- facing supply shortages, costly recalls and layoffs of nearly three-quarters of its workforce -- went under without any buyers.

Before Fisker defaulted and essentially shut down in April and VPG defaulted on another $50 million federal loan in May, the Energy Department had quietly shut down its $25 billion Advanced Technology Vehicles Manufacturing loan program. In total, about $8.5 billion had been approved for loans.

In late August, the Energy Department said it was accepting applications and conducting an "active outreach program" to prospective companies. Earlier this month, it said it would loan an additional $45 million to 38 projects that are supposed to improve batteries, air conditioning and other essential transportation needs.

Originally commissioned in 2008 by President George W. Bush and paid out by President Barack Obama starting in 2009, the program was supposed to jump start the production of alternative-fuel cars. And it has: Tesla repaid the government its full $465 million loan, with interest, nine years ahead of schedule. Nissan took $1.4 billion for its battery plant in Smyrna, Tenn., where it now builds most Leaf models, and Ford is spending $5.9 billion on various projects, including the Focus Electric and plug-in C-Max and Fusion Energi hybrid models. Both Ford and Nissan have not repaid their loans, which are not due until past 2020.

[Source: U.S. Department of Energy]
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