YOUNGSTOWN, Ohio – A federal court ruling has upheld an earlier bankruptcy court’s decision that would allow a lawsuit filed two years ago by Lordstown Motors Corp. – now known as Nu Ride Inc. – against electronics giant Foxconn to proceed.
The U.S. District Court for the District of Delaware issued an order Sept. 12 affirming an earlier ruling from a federal bankruptcy court that partially denied and partially granted a motion from Foxconn to dismiss the case.
On June 27, 2023, electric vehicle startup Lordstown Motors Corp. filed for Chapter 11 bankruptcy in Delaware. That same day, the company filed an adversary proceeding through the court against Foxconn, seeking relief from “fraudulent and tortious conduct” and alleging the breach of an investment contract, according to a release from Nu Ride.
Foxconn had entered into a purchase agreement with Lordstown Motors to acquire its factory in Lordstown, a former General Motors assembly plant. The deal also called for a contract manufacturing agreement in which Foxconn would build the Lordstown Motors Endurance EV pickup truck at the plant.
However, the partnership between Foxconn and Lordstown Motors deteriorated after the plant’s sale and Lordstown Motors was forced to declare bankruptcy and filed its lawsuit against Foxconn the same day. Just a handful of Endurance trucks were built.
Foxconn responded by filing motions to dismiss the lawsuit, citing that all the claims in the complaint were subject to binding arbitration, according to court documents. However, the bankruptcy court found that just two were subject to arbitration, while nine of the claims against Foxconn were not.
Foxconn appealed the decision to the U.S. District Court in Delaware last year, and the bankruptcy court in December ordered a stay in the litigation proceedings pending the outcome of its appeal.
“We are pleased that the District Court affirmed the bankruptcy court decision,” Andrew Sole, Nu Ride’s chairman of the board, said in a statement.
In 2023, Lordstown Motors sold its assets to Stephen Burns, the company’s former CEO, for $10.2 million. The company exited bankruptcy in March 2024 as Nu Ride Inc.
The adversarial litigation against Foxconn has since been pursued under Nu Ride’s name.
“The company continues to believe that Foxconn’s actions have caused substantial harm to the company’s operations and prospects and caused significant damages and intends to vigorously continue pursuing this litigation,” Nu Ride said in a press release. “However, no assurances can be provided as to the company having sufficient resources to pursue the Foxconn litigation, the outcome or recoveries, if any.”
Foxconn has since sold the Lordstown plant to an entity related to the Japanese investment firm SoftBank Group Corp. for $375 million. The operation – in partnership with Foxconn – intends to build and supply components for artificial intelligence data centers to support SoftBank’s Stargate program.
Pictured at top: The former Foxconn plant in Lordstown, which was recently sold to an entity related to the Japanese investment firm SoftBank Group Corp.