The U.S. Department of Justice has declared that bankrupt electric vehicle manufacturer Fisker’s strategy to offload the costs of vehicle recalls onto customers breaches legal standards.
This announcement came through a court filing on Monday, amidst Fisker’s ongoing bankruptcy proceedings initiated in June. The company, which has been attempting to reorganize its debts and sell its assets to continue operations, has faced multiple recalls this year due to issues with door handles, software, and safety compliance.
According to the court documents, Fisker’s bankruptcy plan includes provisions that contradict the requirements to remedy defective vehicles at no charge—a mandate set by the National Traffic and Motor Vehicle Safety Act. Furthermore, the Justice Department criticized the plan’s proposal to reimburse vehicle owners who pay for repairs themselves, labeling it as illegal.
The scrutiny over Fisker recall charges extends beyond the Department of Justice; the U.S. Securities and Exchange Commission is also investigating, particularly concerned with the transparency of the liquidation plan and the preservation of corporate records.
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