Judge OKs Bidding Procedures, Sale Deadline for Lordstown Motors
YOUNGSTOWN, Ohio – By Oct. 5, the public should know whether Lordstown Motors Corp. has a new owner.
U.S. Bankruptcy Judge Mary F. Walrath on Aug. 8 approved a timetable of bidding and auction procedures related to the sale of the electrical-vehicle manufacturer’s assets.
Walrath, of the U.S. Bankruptcy Court for the District of Delaware, has set an Oct. 5 deadline for a final sales hearing.
Earlier this month, attorneys for Lordstown Motors told the court that the company has received “expressions of interest” from 13 entities that could potentially buy all or part of its assets or liquidate them.
“Some of these proposals have big issues, and some are more promising,” Thomas E. Lauria, lead attorney for Lordstown Motors, told the court during a hearing Aug. 3.
Walrath also ordered a “stalking horse” bid – that is, an opening bid that formulates a basement price for the company’s assets – to be delivered no later than the close of business Aug. 24. Any party objecting to the bid would need to respond within five business days after the notice is filed.
A deadline for all bids is set for 5 p.m. Sept. 8, the judge’s order stipulates. Any objections to the sale must be received by Sept. 14, according to court papers.
An auction, if required, would be held Sept. 19, while the deadline for any objections to the successful bidder is Sept. 26. An auction would be held if more than one qualified bid is submitted to the court.
During the Aug. 3 hearing, Lauria appealed to the court not to delay the asset sale process, citing benefits to all of the parties involved in the case. Lordstown Motors had earlier proposed a more compressed schedule, preferring an Aug. 24 deadline for bids and an auction, if necessary, for Aug. 21.
Lordstown Motors requested the court consider a final sales hearing date of Sept. 12.
That’s the same day the EV maker’s trial with Karma Automotive is scheduled to begin in U.S. District Court for the Central District of California.
Karma sued Lordstown Motors in October 2020, alleging Lordstown Motors poached its employees and stole intellectual property. Karma is seeking nearly $1 billion in damages. Walrath lifted a stay on the litigation after a July 27 hearing.
During the Aug. 3 hearing, Walrath said it was “critical” that the Karma issue be decided before any sale could move forward.
Lordstown Motors filed for bankruptcy protection under Chapter 11 on June 27. That same day, the company sued Hon Hai Technology Group and its affiliate Foxconn for fraud.
Foxconn purchased Lordstown Motors’ plant in May 2022 and entered into a contract manufacturing agreement in which Foxconn would build the all-electric Endurance pickup for the EV startup.
The parties also entered into an investment agreement that stipulated Foxconn would purchase up to $170 million in equity to support and collaborate on future EV products.
Foxconn failed to make the required investments, citing Lordstown Motors had breached the agreement when it received a delisting notice from Nasdaq in April.
Foxconn has not disclosed whether it is interested in buying Lordstown Motors’ assets.
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