HEADLINES
FISKER FILES FOR BANKRUPTCY PROTECTION
ONTARIO SUPERIOR COURT GIVES OK TO RED LOBSTER CANADA SALES PROCESS An Ontario court has approved a sales process and stalking horse bid for Red Lobster Canada, which is operating under court protection from creditors. The move comes after a U.S. court approved the sales process for the company which launched Chapter 11 bankruptcy proceedings last month. Court filings made on June 11 say the steps are meant to “preserve” Red Lobster’s business in Canada and the employment of the company’s 2,000 workers stationed at 27 restaurants across the country. A stalking horse bid is an offer to buy a bankrupt firm or its assets that is arranged ahead of an auction and typically sets a floor price for the assets. The documents say the bid will give lenders a chance to sell the company’s assets in a way that maximiz- es their value and helps them avoid the risk of them being sold for an unreasonably low price. The filings made in Canada come after Florida-based Red Lobster Management LLC shuttered dozens of locations in the U.S. recently and filed for bankrupt- cy protection, which a Canadian court agreed to recognize last month.
Fisker is the latest all-electric vehicle startup to file for Chapter 11 bankruptcy protection amid lacklus- ter consumer demand, significant cash burn, and operational and product issues. For investors, the writing’s been on the wall for some time as Fisker issued a going concern about its abil- ity to continue as a company in February, leading its charismatic founder and CEO Henrik Fisker to disappear from social media and the limelight. It’s the latest in a series of EV companies to collapse. Other companies backed by special purpose acquisition companies, or SPAC, have also filed for bankruptcy protection. That list includes companies such as Proterra, Lordstown Motors, and Electric Last Mile Solutions. Others such as Nikola and Faraday Future remain in business but trade for un- der $1 per share amid operational challenges, missed targets, and broader industry headwinds. Fisher’s filing comes after it failed to secure an investment from a big automaker to keep afloat. Nearly four years ago, Fisker announced plans to go public through a reverse merger with an Apollo-backed SPAC that valued the company at $2.9 billion. The deal infused Fisker with more than $1 billion in cash.
8 SPOTLIGHT MAGAZINE ON BUSINESS MAGAZINE • VOL 24 ISSUE 3
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