LAS Capital Reunites Steve Burns with Former Co-Execs

YOUNGSTOWN, Ohio – Former Lordstown Motors Corp. CEO Stephen S. Burns’ bid to purchase the assets of the company he founded would add to the portfolio of his new venture of electric-vehicle startups, which also include alumni from his previous businesses.

Lordstown Motors announced late Friday that an agreement was reached to sell the assets of the bankrupt EV truck manufacturer to LAS Capital, a Delaware corporation headed by Burns, for $10 million.

The deal includes “specified assets … related to the design, production and sale of electric light- duty vehicles focused on the commercial fleet market free and clear of liens, claims, encumbrances and other interests,” according to a regulatory filing Friday, plus the assumption of “certain specified liabilities.” It excludes the $100 million or so in cash the company holds.

These assets presumably include battery-pack and hub motor assembly lines, which the company continued to own after it sold its Lordstown manufacturing plant last year to Foxconn for $230 million. The lines were used to help produce the Endurance all-electric pickup.

Other assets include all finished and unfinished Endurance pickups.

LAS Capital — LAS is an acronym for land, air and sea — boasts three EV startups as part of its investment portfolio mix, according to its website. Each company has developed early models for electric-powered land, air and water mobility. A fourth company affiliated with LAS has developed a “smart” shower head for home use.

“A lot of us are EV car folks,” Burns says in a video posted on the site. “We’ve come to realize when we saw what we did with cars and what others are doing with electric cars is that all these modalities should be electric.”

Burns resigned from Lordstown Motors in June 2021 after an internal inquiry found “issues regarding the accuracy of certain statements regarding the company’s preorders.”

Chief financial officer Julio Rodriguez also resigned. According to a U.S. Securities and Exchange Commission filing posted Friday, Rodriguez is identified as an “indirect” manager of LAS Capital.

Burns received $750,000 in severance pay over 18 months. By November of 2021, the former CEO began to sell his stock in the company, ultimately cashing out $66.8 million.

At least two of the EV startups under LAS reunite Burns with former colleagues from his past business ventures, including Lordstown Motors.

LAS Capital lists it as an investor in a water-based business called Blue Innovations Group, a Florida-based company in the process of developing an all-EV boat. According to the website, the goal of the company is to “revolutionize the entire boating industry.”

The CEO of Blue Innovations is John Vo, whom the website identifies as the former head of global production at Tesla. The website does not acknowledge that Vo was also the former vice president of propulsion at Lordstown Motors while Burns served as CEO.

Vo was forced to return profits made from short-swing transactions while at Lordstown Motors, according to published reports.

“I’d like to forget about that,” Vo told the Tampa Bay Times in December 2022 after announcing the launch of Blue Innovations.

Another LAS EV startup, Greenstreet, is headed by Duane Hughes, the former chief operating officer and CEO of Workhorse Group, the company Burns founded before establishing Lordstown Motors in 2019.

Greenstreet bills itself as a manufacturer of an electric-powered “Fun & Sun” three-wheeled cycle with a 250-mile battery range and a top speed of 80 mph.

Burns resigned from Workhorse in February 2019 and subsequently formed Lordstown Motors that year, negotiating a deal to purchase General Motors Co.’s Lordstown manufacturing complex for $20 million.

Hughes, who served as COO of Workhorse Group, was elevated to CEO after Burns left that company. Under a deal with Lordstown Motors, Workhorse received a 10% stake in the company for allowing the use of technology related to a prototype truck it was developing.

Workhorse manufactures light-duty EV delivery vehicles and the company in 2021 submitted a bid proposal to produce all-electric vehicles for the U.S. Postal Service’s next-generation fleet.

Instead, the bid went to Wisconsin-based Oshkosh. In 2022, Workhorse sold all of its stock in Lordstown Motors, claiming a loss of $75 million.

Meantime, the SEC and U.S. Department of Justice launched an investigation related to alleged fraud at Workhorse. While the SEC declined to take enforcement action, the Justice Department investigation — it is related to insider stock sales before the USPS announced its bid awards – continues.

Hughes resigned from Workhorse in July 2021.

Ryse, a third startup in the portfolio of LAS Capital, is developing what it says will be the first electric vertical takeoff and landing, or EVTOL, for commercial sale in the United States. Its CEO, Mickey Kowitz, is a former director at Lordstown Motors.

A lawsuit filed in U.S. District Court in Delaware in May 2021 names Kowitz as a defendant, among other directors and executives, alleging they enabled Lordstown Motors to issue “improper public statements concerning its business, operations and prospects.”

That case is one of several investor lawsuits related to Lordstown Motors before various courts. In addition, an SEC and Department of Justice investigation related to preorders of the Endurance and the Lordstown Motors merger with a special purpose acquisition company, or SPAC, also continues.

Lordstown Motors went public through a SPAC offering in October 2020.

In March 2021, however, short-seller Hindenburg Research published a scathing report that accused Lordstown executives and directors of misleading investors regarding preorders for the Endurance, its production capabilities and its finances.

Shares of Lordstown Motors plunged in the wake of that report, triggering a rash of investor lawsuits against the company, its directors and executives, including Burns.

Under terms of the LAS Capital purchase agreement, the group would not assume the legal costs associated with these lawsuits.

Pictured at top: Stephen S. Burns is the founder and former CEO of Lordstown Motors Corp. (2020 File Photo)

Copyright 2024 The Business Journal, Youngstown, Ohio.