The U.S. Department of Justice said in a court filing on Monday that bankrupt electric vehicle maker Fisker’s plan to pass on the costs of vehicle recalls to customers is illegal.
Fisker filed for bankruptcy protection in June, with plans to sell its assets and restructure its debt in an attempt to salvage operations.
The company has also issued multiple recalls this year to fix issues related to door handles, faulty software and noncompliance with safety standards.
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As a part of Fisker’s bankruptcy plan, the manufacturer is required to remedy defective and noncompliant vehicles “without charge when the vehicle … is presented for remedy,” the filing showed.
Fisker did not immediately respond to a Reuters request for comment.
The Justice Department also said that the part of the plan where vehicle owners could get reimbursed for paying for repairs out of their pocket also violates the National Traffic and Motor Vehicle Safety Act.
Fisker is also being investigated by the U.S. Securities and Exchange Commission, which objects the liquidation plan, citing the lack of clarity on how and whether Fisker intends to preserve its corporate records.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Alan Barona)
