Lordstown Motors to Begin Soliciting Votes for Chapter 11 Plan
LORDSTOWN, Ohio – What could have been a lengthy hearing over six objections to the Chapter 11 disclosure plan put forth by Lordstown Motors Corp. instead became a relatively short demonstration of how bankruptcy lawyers will work through the night (and weekends) to get legal language right.
Case in point: the hearing Tuesday over the document that spells out the order in which Lordstown’s creditors would be paid and whether securities fraud litigants would retain their rights to collect monetary damages after the bankruptcy case closes.
Creditors and shareholders must vote on whether to accept the reorganization plan that is spelled out in what one attorney described as the “voluminous” disclosure statement.
“We have resolved all of the disclosure objections, with the exception of one, and I’m not happy about that,” said attorney David Turetsky on behalf of Lordstown Motors.
“We have created a truly consensual regimen,” he said. “We submit that objection should be overruled.”
In short order, the judge did. But not before attorneys for the RIDE Investment Group, which filed a securities fraud lawsuit in July naming Lordstown Motors CEO Edward Hightower and CFO Adam Kroll, argued that an “opt-in” check-off box should be added to the disclosure plan acceptance ballot.
To resolve the objections of the plaintiffs in other securities fraud lawsuits, the U.S. Securities and Exchange Commission and the U.S. Trustee, three times since Oct. 25 – including over the weekend and early Tuesday morning – lawyers for Lordstown Motors filed with the court modified and amended disclosure plans.
Fair enough, ruled Judge Mary F. Walrath.
“The disclosure plan contains adequate information in terms of voting,” she said. “The debtor can go ahead and send out the materials.”
Late Tuesday, Lordstown Motors notified the SEC that it expects to “commence solicitation of votes” Nov. 7 from its creditors and shareholders for approval of the final amended reorganization plan. The company noted that “even if such approval is obtained, consummation … remains subject to court approval.
A tentative hearing date has been set for Dec. 19.
Copyright 2023 The Business Journal, Youngstown, Ohio.