Current:Home > FinanceLaunched to great fanfare a few years ago, Lordstown Motors is already bankrupt-Angel Dreamer Wealth Society D1 Reviews & Insights
Launched to great fanfare a few years ago, Lordstown Motors is already bankrupt
View Date:2024-12-23 20:51:04
Commercial electric vehicle startup Lordstown Motors Corp. has filed for Chapter 11 bankruptcy protection nearly two months after it warned that it was in danger of failing.
In early May electronics company Foxconn wavered on a $170 million investment in Lordstown. The Ohio company said in a regulatory filing at the time that it had received notice from Foxconn on April 21 that it was in breach of their investment agreement because it had received a delisting warning from Nasdaq two days earlier.
Lordstown said at the time that given the uncertainties, there was substantial doubt it could continue as a going concern.
Lordstown was in danger of being delisted from the Nasdaq because its share price closed below $1 on March 7 and continued to falter after that.
Foxconn told Lordstown at the time that it may unwind their agreement if Lordstown did not resolve its listing issues. Lordstown said in May that it had notified Foxconn that, among other things, it believed the breach allegations were without merit and that the terms of the investment agreement didn't allow Foxconn to end the deal following the initial closing.
Lordstown said Tuesday that it was filing a lawsuit against technology company Hon Hai Technology Group and certain affiliates, including Foxconn. Lordstown said the lawsuit "details Foxconn's fraud and willful and consistent failure to live up to its commercial and financial commitments to the company." It claims Foxconn's actions led to material damage to Lordstown and its future prospects.
Lordstown said it's also looking to sell its Endurance vehicle and related assets. The company said that restructuring under Chapter 11 will help with the sale process of Endurance and speed up the timeline for hearing its lawsuit against Foxconn.
In November Lordstown had announced that it had received approval to ship the first batch of its first model, the Endurance pickup.
The trucks were built in an old General Motors small-car assembly plant in Lordstown, Ohio, near Cleveland, that was purchased in 2021 by Taiwan's Foxconn Technology Group, the world's largest electronics maker.
Lordstown said that it is entering Chapter 11 with significant cash on hand and is debt-free.
The company's stock plunged more than 65% before the market open.
- In:
- Bankruptcy
- Electric Vehicle
- Electric Cars
- Chapter 11 Bankruptcy
veryGood! (59)
Related
- Arizona Supreme Court declines emergency request to extend ballot ‘curing’ deadline
- A studio helps artists with developmental disabilities find their voice. It was almost shuttered.
- Kim Dotcom loses 12-year fight to halt deportation from New Zealand to face US copyright case
- Round 2 of US Rep. Gaetz vs. former Speaker McCarthy plays out in Florida GOP primary
- Chris Evans Shares Thoughts on Starting a Family With Wife Alba Baptista
- Off the Grid: Sally breaks down USA TODAY's daily crossword, But Daddy I Love Crosswords
- Nevada gaming regulators accuse Resorts World casino of accommodating illegal gambling
- Feds announce funding push for ropeless fishing gear that spares rare whales
- Ryan Reynolds Makes Dream Come True for 9-Year-Old Fan Battling Cancer
- US arrests reputed Peruvian gang leader wanted for 23 killings in his home country
Ranking
- 'Heretic' spoilers! Hugh Grant spills on his horror villain's fears and fate
- Shine Bright With Blue Nile’s 25th Anniversary Sale— Best Savings of the Year on the Most Popular Styles
- NBA schedule 2024-25: Christmas Day games include Lakers-Warriors and 76ers-Celtics
- Babe Ruth jersey could sell for record-breaking $30 million at auction
- Vermont man is fit to stand trial over shooting of 3 Palestinian college students
- Feds announce funding push for ropeless fishing gear that spares rare whales
- Former Alabama police officer agrees to plead guilty in alleged drug planting scheme
- Zoë Kravitz Details Hurtful Decision to Move in With Dad Lenny Kravitz Amid Lisa Bonet Divorce
Recommendation
-
Stock market today: Asian shares mostly decline, shrugging off Wall Street’s overnight rally
-
Falcons sign Justin Simmons in latest big-name addition
-
Michael Brown’s death transformed a nation and sparked a decade of American reckoning on race
-
West Virginia’s personal income tax to drop by 4% next year, Gov. Justice says
-
PSA: Coach Outlet Has Stocking Stuffers, Gifts Under $100 & More for the Holidays RN (up to 60% Off)
-
TikTok compares itself to foreign-owned American news outlets as it fights forced sale or ban
-
What is vitamin B6 good for? Health experts weigh in on whether you need a supplement.
-
TikToker Nara Smith Addresses Accusation She’s Using Ozempic