Lordstown Motors Ex-CEO Granted Approval to Purchase Company Assets for $10 Million

         

Summary: Lordstown Motors, the electric vehicle company, has received approval from the U.S. bankruptcy court to sell its manufacturing assets to a new company affiliated with its founder and former CEO, Stephen Burns, for $10.2 million. The sale includes intellectual property, business records, and machinery related to electric vehicle production. The purchase does not grant any rights to pursue legal claims against Lordstown’s directors or equity owners.

Electric vehicle company Lordstown Motors has been given permission by the U.S. bankruptcy court to sell its manufacturing assets to a new company. The new company, LAS Capital, owned by Lordstown’s founder and ex-CEO Stephen Burns, will acquire Lordstown’s intellectual property, business records, and machinery used in the production of electric vehicles. The sale was approved by U.S. Bankruptcy Judge Mary Walrath, who stated that it was the best offer available.

It should be noted that the sale does not include any rights to pursue legal claims against Lordstown’s directors, officers, or equity owners. These rights will remain with the bankrupt company. Lordstown has faced multiple claims from investors who allege that the company misled consumers and investors about its ability to increase electric vehicle production. Lordstown filed for bankruptcy in June after failing to resolve a dispute over a promised investment from Taiwan’s Foxconn, which had agreed to collaborate on the development of Lordstown’s electric pickup truck.

According to LAS Capital’s attorney, the company will not be purchasing any Endurance trucks for resale to the public and will not acquire any vehicles that have already been sold to customers and are subject to recalls. The majority of the purchased equipment is currently located at an Ohio manufacturing facility owned by Foxconn, and LAS Capital will be working with Foxconn to remove the machinery.

Lordstown’s former CEO, Stephen Burns, resigned from his position in 2021 following an investigation into claims made by a short seller. The investigation revealed that Lordstown had overstated the viability of its technology and misled investors about its production plans. Burns later sold his remaining equity in the company before it filed for bankruptcy. Another individual involved with LAS Capital is Lordstown’s former CFO, Julio Rodriguez, who resigned at the same time as Burns and is now a minority owner and manager in LAS Capital.

Tags: Lordstown Motors, bankruptcy court, manufacturing assets, electric vehicles, Stephen Burns, LAS Capital, intellectual property, business records, electric vehicle production, Foxconn

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