The bankrupt electric vehicle startup, Lordstown Motors, has unveiled its intention to sell its remaining assets to an investment firm led by its founder and original CEO, Steve Burns, as disclosed in an SEC filing submitted on September 29th.
This investment firm, known as LAS Capital, includes former Lordstown Chief Financial Officer Julio Rodriguez as a significant shareholder alongside Burns. They have agreed to acquire these assets for a sum of $10 million in cash.
Both Burns and Rodriguez departed from Lordstown in 2021 in the wake of an internal investigation that uncovered discrepancies related to claimed pre-orders for the company’s inaugural vehicle, the Endurance full-size pickup truck.
Steve Burns is also the founder of Workhorse Group, a company specializing in the manufacture of electric commercial vans, trucks, and drones.
The assets to be acquired by LAS Capital encompass specific intellectual property and manufacturing equipment related to batteries and motors. Notably, the plant responsible for producing the Endurance, a former General Motors facility located in Ohio, had been sold by Lordstown to Foxconn in 2021. This deal was intended to involve Foxconn in building the Endurance and collaborating on future Lordstown models under contract.
The completion of the asset sale to LAS Capital is contingent on receiving court approval and is scheduled to be finalized by the end of October.
The Endurance, featuring in-wheel motors but facing challenges in terms of performance compared to rival electric trucks, commenced production in late 2022. However, production was halted after only a few months due to the discovery of an electrical issue in the truck and the realization that the cost of production far exceeded its selling price. Consequently, Lordstown Motors filed for Chapter 11 bankruptcy protection in June.
Before seeking bankruptcy protection, Lordstown had attempted to negotiate a new agreement with Foxconn for the joint development of a next-generation vehicle to be produced at the Ohio plant. Unfortunately, this endeavor collapsed in May when Foxconn withdrew from the partnership.
Frequently Asked Questions (FAQs) about asset sale to LAS Capital
What led to Lordstown Motors filing for bankruptcy?
Lordstown Motors filed for bankruptcy primarily due to several challenges related to its Endurance full-size pickup truck. Production of the Endurance began in late 2022 but was halted after a few months due to an electrical issue with the truck and the realization that the cost of building it exceeded its selling price.
Why did Steve Burns and Julio Rodriguez leave Lordstown Motors?
Steve Burns and Julio Rodriguez departed from Lordstown Motors in 2021 following an internal investigation that revealed inaccuracies concerning claimed pre-orders for the Endurance pickup truck. This controversy led to their departure from the company.
What assets are being sold to LAS Capital?
The assets being sold to LAS Capital include specific intellectual property related to Lordstown Motors and manufacturing equipment used for batteries and motors. These assets are part of the bankruptcy sale.
What is LAS Capital’s involvement in this acquisition?
LAS Capital, an investment firm, is led by Steve Burns, the founder and original CEO of Lordstown Motors, and includes Julio Rodriguez, the former Chief Financial Officer of Lordstown, as a significant shareholder. LAS Capital has agreed to purchase Lordstown’s remaining assets for $10 million in cash.
What happened to the Ohio plant that used to build the Endurance?
The plant in Ohio that was responsible for building the Endurance was sold by Lordstown Motors to Foxconn in 2021. The sale was part of a deal that was supposed to involve Foxconn in manufacturing the Endurance and collaborating on future Lordstown models under contract.
When is the asset sale to LAS Capital expected to be completed?
The asset sale to LAS Capital is set to be completed by the end of October, pending court approval.
More about asset sale to LAS Capital
- Lordstown Motors Files for Bankruptcy
- Steve Burns and Julio Rodriguez Leave Lordstown Motors
- Details of LAS Capital’s Asset Purchase
- Foxconn’s Purchase of the Ohio Plant
- Timeline of Lordstown Motors’ Troubles