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PrivCo -- The Consequences of Being a Lender That Carries the Burden of Political Costs -- "The D.O.E. Acted Like a Landlord Who Accepted a Tenant's Security Deposit in Place of the Month's Rent"

April 23, 2013

NEW YORK, NY--(Marketwired - Apr 23, 2013) - Fisker "missed" its first interest payment to the Department of Energy -- the company did not have sufficient cash left in its bank account to make the $20.2 million loan payment (determined by PrivCo through calculations based on the loan drawdown schedule and analysis of loan documentation) by April 22nd, 2013 at 1pm ET. However, as a precise legal matter, Fisker's payment was in fact on time, and there was no payment default through the following "loophole" consented to by the DOE in order to avoid a formal and public payment default, just 2 days before a Congressional House Oversight Committee Hearing scheduled for April 24 at 2pm ET. The hearing will call into question the DOE's "Bad Bet on Fisker" and potentially negligent underwriting of the $528.7M credit facility, ultimately raising the question of whether the DOE ignored multiple events of default or issued written amendments and waivers to the original loan agreements while failing to inform the public.

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