Manufacturing setbacks can sometimes be severe for certain companies, increasing costs significantly and forcing them to file for bankruptcy.
Electric vehicle maker Fisker, for example, in June simultaneously filed for Chapter 11 protection and issued a recall of all of its 2023 Fisker Ocean vehicles produced through May 2024.
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The problem requiring the recall involved door handles that might stick and prevent passengers from entering or exiting the vehicle. The problem was caused by a “dimensional variation” in the door handle measurements, InsideEVs reported. Fisker recalled 12,523 Oceans sold in the U.S., Canada and Europe to address the problem.
The recall wasn’t the only reason for the Chapter 11 filing, as the company has cited “various market and macroeconomic headwinds” for contributing to its financial distress.
The company also faced various other mechanical issues, including “unintentional vehicle movement,” investigated by the National Highway Traffic Safety Administration in February, which cited the Ocean’s inability to shift between gears, including the parking gear.
A major problem for bankrupt Fisker and its various recalls is its lack of replacement parts for repairs. The company never stockpiled an adequate amount of replacement parts for repairs, former Fisker employees told InsideEVs. In some cases, service departments have needed to source parts from disassembled cars.
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In another recall case, Apple sauce manufacturer WanaBana on May 15 filed for Chapter 7 bankruptcy liquidation after a November 2023 recall of its cinnamon applesauce that had led to several lead poisoning lawsuits.
In November 2023, Wana Bana recalled its cinnamon applesauce pouches sold in stores in Illinois, Indiana and Missouri because of high lead levels that were making children sick. The products contained more than 2,000 times the U.S. legal limit for lead in food.
Ice cream maker Totally Cool files for Chapter 11 bankruptcy.
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Totally Cool files Chapter 11 after recall
And now, Totally Cool Inc., which manufactures ice cream brands including Friendly’s, Hershey’s Ice Cream, Abilyn’s Frozen Bakery, Jeni’s and ChipWich, filed for Chapter 11 bankruptcy protection on Aug. 23 after halting production and distribution and recalling all of its ice cream products two months earlier for potential Listeria monocytogenes contamination.
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The Owings Mills, Md., debtor filed its petition in the U.S. Bankruptcy Court for the District of Maryland listing $1 million to $10 million in liabilities and $500,000 to $1 million in assets.
Totally Cool in June shut down production and recalled 69 ice cream products across 13 brands after a Food & Drug Administration sampling discovered the presence of Listeria monocytogenes. The company investigated the contamination and took preventative actions, according to a June 24 company statement.
The products subject to recall were distributed nationwide and available in retail locations and direct delivery. No illnesses had been reported as of the statement.
Consumers with recalled products in their possession were urged to return them to the place of purchase for a full refund.
Listeria monocytogenes is an organism that can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems, the statement said.
Healthy individuals may suffer only short-term symptoms, such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, however Listeria infection can cause miscarriage and stillbirths among pregnant women.
While the Listeria contamination led to Totally Cool’s bankruptcy, financial distress was the reason for Midwest ice cream retailer Oberweis Ice Cream and Dairy’s Chapter 11 filing in April.
Oberweis emerged from bankruptcy, as it completed a sale of its business on June 17 to Hoffmann Family of Companies.
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