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06/14/2013, 01:00PM ET
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06/14/2013, 09:00AM ET
On Mar 02, 2012 01:30PM ET in Energy
The hits just keep on coming for electric vehicle (EV) maker Fisker Automotive Inc. (Fisker). An investor is suing the company for alleged fraud and breach of duty in the sale of company stock.
Fisker makes great looking EVs but they just cannot keep their books in order and now they are being sued by an investor by the name of Daniel Wray. Between October 2009 and April 2011 Wray bought about $210,000 in unregistered preferred Fisker stock. A nice investment in a company that looked to have potential, that is until things began to go south for Fisker.
Wray alleges he received word from Fisker on January 18th in the form of a letter informing him that due to the need for equity capital financing there was now a pay to play action in effect — Fisker wanted Wray to invest $83,922.32 on top of his previous investments. If Wray failed to do so by January 27th Wray would allegedly lose rights that he received when he first purchased Fisker stock. Rights such as a discounted price if the company went public, protection against dilution of his shares by later purchasers, and preference in a bankruptcy.
The lawsuit brought by Wray is basically saying that Fisker’s preferred stock is a scam.
To further complicate matters, the U.S. Department of Energy has frozen $336 million of Fiskers $529 million loan from last May because Fisker failed to meet a number of undisclosed milestones. Plus in the past few months Fisker has closed their Delaware plant and laid off 71 workers in Delaware and Orange County.
At a time when Fisker could really use some money from outside investors this lawsuit, and the allegations brought by the lawsuit, mean more financial hardship for a once promising company. This is not the first time Fisker has been sued due to questionable business practices. In 2008 Tesla Motors filed a lawsuit accusing Henrik Fisker of signing a design contract in order to only get an inside look at Tesla’s confidential design information and secrets, and then launch Fisker Automotive and announce a competing EV less than a year later. The judge in the case eventually ruled in favor of Fisker, denying Tesla’s claim that its competitor had pirated Tesla’s hybrid technology.
The Fisker Karma sells for $103,000.
Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison