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Judge approves Fisker bankruptcy plan favored by car owners

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Judge approves Fisker bankruptcy plan favored by car owners

Fisker Inc. will wind down operations under a bankruptcy plan approved Friday that should allow car owners to drive their cars for years — while not paying anything to shareholders who were wiped out investing in the defunct Southern California electric-vehicle maker.

The plan approved by U.S. Bankruptcy Court Judge Thomas Horan in Delaware comes as Fisker is grappling with a Securities and Exchange Commission investigation into possible securities violations at the company before its June bankruptcy filing.

Fisker disclosed in August that it had been subpoenaed by the SEC, which recently confirmed that it was investigating the company and demanded that the bankruptcy plan preserve records.

“The SEC has been much more aggressive in pursuing its claims and remedies, even if the focus of its investigation has filed for bankruptcy,” said Jennifer Lee, a former assistant director at the SEC Division of Enforcement now in private practice.

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The agency has declined to comment on its investigation.

Co-founders Henrik Fisker, the company’s chairman and chief executive, and his wife, Geeta Gupta-Fisker, the chief financial and operating officer, and other officials are facing multiple shareholder lawsuits.

Plaintiffs allege violations of fiduciary duties and securities laws, including media appearances by Henrik Fisker touting the company’s prospects even as its fortunes declined.

Horan issued his ruling after a flurry of filings, hearings and closed-door meetings this week as Fisker, its creditors and owners worked out an agreement.

Leadership of the Fisker Owners Assn. came out last week in favor of the proposed plan, stating the vehicle maker had made progress in addressing open recalls Fisker had issued for its Ocean SUV and had engaged in “constructive dialogue” over maintenance issues.

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The approved plan also resolved concerns by the National Highway Transportation Safety Board over how to pay for the costs of recalls, including one for malfunctioning brakes and another for a defective water pump. Under the approved plan, Fisker’s estate will cover those costs.

Another issue that was resolved was access to Fisker’s cloud server for over-the-air software updates the Ocean must receive to operate. Access to those updates will be provided by American Lease, a Bronx, N.Y., business that leases Uber and Lyft cars. It bid $46.25 million for Fisker’s unsold inventory of more than 3,000 cars.

American Lease agreed late this week to pay $2.5 million for access to the cloud for five years and will share that access with Fisker’s more than 6,000 car owners for an undetermined price.

“We’re happy with the outcome today, and we’re optimistic about the future,” said Brandon Jones, president of owners association. “There’s still some discussion and negotiation needed, but we’ll have the services we need to maintain our cars.”

Founded in 2016, Fisker went public in 2020 via a special purpose acquisition company backed by private equity firm Apollo Global Management. The company raised $1 billion in equity capital and borrowed even more, but ran out of money.

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Headquartered in Manhattan Beach, Fisker moved to La Palma in Orange County earlier this year.

Henrik Fisker, a noted automotive designer, envisioned the company’s debut model, the Ocean, as a competitor to Tesla’s Model Y, but the company had trouble making and delivering the high-tech SUV. The Ocean was plagued by software glitches, though its ride and build were praised.

Several thousand car owners were eligible to vote on the plan, because they had filed claims against Fisker making them unsecured creditors.

Evan Scott, 39, filed two claims, one for nearly $28,000 based on the loss of value of his Ocean after price cuts, and a second for $1,000 after his car was delivered with faulty tires that had to be replaced after four months. He said he voted for the plan but feels he was misled by the company after purchasing some $50,000 in stock, which is now worthless.

“Everything they said was a lie for the last six months, and they knew they were going to file for bankruptcy,” said the Portland, Ore., resident.

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Fisker’s stock reached a high of $28.50 in March 2021 amid peak interest in electric vehicles and a stock bubble that was popped after a rise in interest rates the following year. By the time of Fisker’s bankruptcy, its shares were trading for a nickel.

The Ocean’s base model retailed for $38,999 with the highest trim version going for more than $60,000, until a series of sharp price cuts. American Lease purchased its fleet of Oceans for about $13,900 per vehicle.

Fisker filed for bankruptcy after it was unable to secure a strategic investment from an auto manufacturer that Reuters identified as Nissan. It also failed in efforts to sell the company to other buyers. It estimated liabilities of up to $500 million and assets at between $500 million and $1 billion at the time of the filing.

It is being liquidated under Chapter 11 of the bankruptcy code typically used by companies seeking to restructure and remain in business. The process, however, has allowed management to remain in control of day to day operations of the company as it works through recalls and other issues.

By the time the bankruptcy plan was approved there were more than 4,000 claims filed against Fisker, including two that totaled more than $1 billion — one for $694 million for debt held by U.S. Bank, and a second for $475 million by Magna International, which manufactured the Ocean for Fisker at an Austrian plant.

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Fisker has yet to sell the assets it owns in Austria as well as its intellectual property, which includes the vehicles designs and software code — which theoretically could be purchased by another auto maker to produce the Ocean and other vehicles Fisker had planned. Proceeds from those sales will go into a trust, with the majority received by the company’s secured creditor.

That creditor is CVI Investments and its investment manager, Heights Capital Management Inc., affiliates of Susquehanna International Group, a large Pennsylvania trading firm founded by billionaire Jeff Yass. It has a secured claim of more than $180 million stemming from debt it is owed by Fisker.

A number of shareholders sent letters to the court asking for an SEC inquiry into Fisker’s dealings with the creditor, whose position as a secured lender had been opposed by unsecured creditors earlier in the bankruptcy process. Attorneys for CVI have not responded to requests for comment.

Car owners seeking compensation may have other avenues to recover funds from the loss of warranty protection, software and mechanical problems and other issues.

The law firm Hagens Berman is filing arbitration cases against J.P. Morgan Chase Bank, a leading Fisker auto loan maker. Partner Steve Berman said his firm is proceeding with some 1,300 individual arbitration demands. Chase declined to comment.

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In a first for the country, voters in Monterey Park ban data centers

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In a first for the country, voters in Monterey Park ban data centers

Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.

As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.

Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.

Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.

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That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.

“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”

The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.

The Data Center Coalition, an industry trade group, expressed disappointment in the vote.

“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.

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“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”

SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.

The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.

City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.

There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.

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“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.

Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.

California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.

That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.

In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.

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Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”

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Rent-hike ban to protect fire victims ends despite gouging concerns

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Rent-hike ban to protect fire victims ends despite gouging concerns

A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.

The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.

The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.

“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”

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Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.

It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.

Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.

“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.

Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.

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“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”

Mitchell did not immediately respond to a request for comment.

There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.

In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.

In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.

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A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”

“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.

Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.

L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.

Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.

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Newsom defended the price-gouging protections shortly after they went into effect.

“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”

The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.

“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.

Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.

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Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.

The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.

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Read Nick Bilton’s Letter to Scott Pelley

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Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

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