Lordstown Motors Is No More as Nu Ride Hits the Road
YOUNGSTOWN, Ohio – A wholly reconstituted company has emerged from the wreckage of former electric vehicle producer Lordstown Motors Corp., with the interests of a major shareholder still intact.
Nu Ride Inc., formerly known as Lordstown Motors Corp., announced Thursday that it has successfully emerged from bankruptcy and its stock reissued under a new ticker symbol – NRDE – on the OTC Pink Market, according to a regulatory filing.
The new company is essentially a shell corporation that would allow it to merge with or acquire another business, according to its website. Nu Ride reports it has emerged from bankruptcy with $78 million in cash and $1 billion of net operating loss carry forwards and various causes of action.
It is unclear what type of venture Nu Ride, now based in New York, will pursue.
Moreover, the bankruptcy exit plan recently approved by Judge Mary F. Walrath of U.S. Bankruptcy Court in Delaware preserves Foxconn’s equity stake in the new company.
Foxconn, the Taiwanese tech giant that two years ago entered into a contract manufacturing agreement with Lordstown Motors, is now locked in litigation with the former electric vehicle manufacturer. Last year, Lordstown Motors filed a lawsuit against Foxconn — on the same day it filed for protection under Chapter 11 — alleging breach of contract. Foxconn has filed motions in U.S. Bankruptcy court to have the complaint dismissed.
Nu Ride will be led by a new slate of executives and directors, according to filings with the U.S. Securities and Exchange Commission.
The employment of three Lordstown Motors executives – Daniel Ninivaggi, Edward Hightower and Adam Kroll – would be terminated, and all would receive severance pay previously approved by the U.S. Bankruptcy Court.
Under the plan, former executive chairman Ninivaggi would receive $550,000; former president and CEO Hightower would receive $975,276; and Kroll, Lordstown Motors’ former chief financial officer, would receive a severance of $685,000, a March 14 filing stated.
William Gallagher is now the new CEO of the newly formed Nu Ride Inc., the filing said.
Also, the plan calls for the appointment of a new board of directors. Ninivaggi, Hightower, Joseph B. Anderson Jr., Keith Feldman, David T. Hamamoto, Jane Reiss, Laura J. Soave, Dale Spencer and Angela Strand are no longer serving as directors of the company.
The new board consists of Alexander C. Matina, Andrew L. Sole, Michael J. Wartell, Neil Werner and Alexandre Zyngier, according to the SEC filings.
The U.S. Bankruptcy Court in Delaware confirmed Lordstown Motors’ Chapter 11 exit plan on March 5.
The complex case resulted in Lordstown Motors resolving most of its obligations to its major creditors and settled the majority of shareholder lawsuits levied against the company.
Last year, Lordstown Motors sold its assets to its former CEO, Steve Burns, and his LAS Capital, for $10.2 million. Burns has since started a new venture, LandX.
Burns resigned as Lordstown’s CEO in June 2021 after an internal inquiry found that the company and executives made erroneous statements related to pre-orders of the company’s flagship vehicle, the Endurance.
In February, the U.S. Securities and Exchange Commission charged Lordstown Motors with misleading investors about pre-orders of the vehicle and reached a $25.5 million settlement with the company.
The investigation is still ongoing, as is a U.S. Department of Justice inquiry into the matter.
Copyright 2024 The Business Journal, Youngstown, Ohio.
