It hasn’t been a good week in court for either Fisker Automotive or Tesla Motors, both companies handed unexpected legal setbacks.
For Fisker, a federal bankruptcy judge ruled the maker will get only a fraction it had hoped for from its battery supplier, the former A123 Systems. That could make it all the more difficult for the plug-in hybrid maker to forestall its own plunge into Chapter 11, something now widely expected.
As for Tesla, its former communications chief has finally prevailed in a lawsuit alleging he was wrongly dismissed from the company in what has been described as a “Stealth Bloodbath,” and stands to be awarded more than $200,000. But the case could set a precedent for 99 other workers who’ve filed identical claims against the electric vehicle manufacturer.
They’ve joined in a class action suit that says Tesla failed to follow the US Worker Adjustment Retraining Notification, or WARN, Act, which requires a 60-day notice before mass layoffs except under the most dire circumstances, as well as California labor law.
It took former flak David Vespremi nearly five years to get his day in court where his lawyers claimed that Tesla also openly disparaged Vespremi and other executives including Martin Eberhard, who co-founded the battery-car maker along with its current CEO and frequent Twitter-er Elon Musk.
Eberhard settled his own suit against Musk in 2009, the terms kept private.
As for Vespremi, he stands to recover 10,000 shares of stock options that should translate into $207,000. It’s unclear how much Tesla has at risk should the class action suit yield the same finding for its 99 former employees.
Fisker, meanwhile, faces a similar class action suit based on the WARN Act as the result of the recent mass firing of 75% of its 160-member U.S. workforce. The maker is expected to argue that it is exempt from the law under a provision that allows immediate layoffs in the event of a sudden financial crisis.
There’s no question Fisker is in a mess. At the time of the job cuts it had blown through almost all of the more $200 million it had been able to tap from a Department of Energy (DoE) loan, as well as an estimated $1.2 billion it had raised in private capital.
That meant it was counting big on receiving cash it claimed was due from the now-bankrupt A123 Systems – which has since been sold to a Chinese supplier, the Wanxiang Group, and renamed B456.
Fisker was hoping for $139.9 million – including $48.7 million in a breach of warranty and another $91.2 million for failure to honor its supply contract. The judge tossed out the latter claim entirely and only awarded a fraction of the former, a total of just $15 million.
Worse, as an unsecured creditor, Fisker will have to stand in line with its hands out. It’s not clear if or when it actually ever will receive dime one from B456.
And that means it can’t count on the cash to help meet a payment due the DoE later this month. The feds are reportedly pushing Fisker to declare bankruptcy, a process its legal team has already begun to prepare for.
Tags: auto news, car news, david vespremi, fisker a123, fisker automotive, fisker b456, fisker batteries, fisker news, paul a. eisenstein, paul eisenstein, tesla motors, tesla news, tesla wrongful discharge, thedetroitbureau, warn act