Lordstown Motors files bankruptcy, sues former partner Foxconn

By Sarah Lizee

Olympia, Wash., June 27 – Lordstown Motors Corp. filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the District of Delaware, according to a press release.

Alongside its bankruptcy petition, Lordstown Motors filed a complaint against global technology company Hon Hai Technology Group and some of its affiliates, including Foxconn Ventures Pte. Ltd. (collectively, Foxconn), the company’s largest shareholder and former partner.

The litigation details Foxconn's alleged fraud and willful and consistent failure to live up to its commercial and financial commitments, which led to material damage to the company as well as its prospects, Lordstown said.

The company is also launching a marketing and sale process for its all-electric pickup truck Endurance and related assets. The company said the assets are free and clear of any legacy issues.

Under its proposed bid procedures, the company laid out a schedule that sees an Aug. 17 stalking horse notice deadline, an Aug. 24 bid deadline, an Aug. 31 auction and a Sept. 12 sale hearing.

Lordstown Motors said that under its partnership with Foxconn, it had agreed to divest its most valuable assets to Foxconn – namely its manufacturing facility and employees based in Lordstown, Ohio.

The up-front purchase price reflected the expected benefits of the contractual assurances from Foxconn that Foxconn would support the Endurance pickup truck and follow through on a joint vehicle development program, the company said.

“The lawsuit details the fact that Foxconn had no intention of living up to its commitments, particularly with respect to the new vehicle development platform,” Lordstown Motors said in the release.

“As the lawsuit describes, Foxconn simply used its variety of contractual arrangements with the company as a tool to maliciously and in bad faith destroy Lordstown's business – while leveraging resources gained through the partnership to advance its own business interests.”

The company has filed a series of customary first-day motions to continue operating its business and uphold its commitments to stakeholders during the Chapter 11 process.

Jefferies LLC is acting as financial adviser, White & Case LLP is acting as restructuring counsel and Layton & Finger is acting as local restructuring counsel to the company.

In its petition, the company listed 5,001 to 10,000 creditors, $452.31 million in assets and $70.28 million in debt.

Its largest unsecured creditors are Teijin Automotive Technologies, Inc., based in Auburn Hills, Mich., with a $2.08 million trade payable claim, ZF Passive Safety Systems US Inc., based in Washington, Mich., with a $1.98 million trade payable claim, Marelli North America Inc., based in Shelbyville, Tenn., with a $1.61 million trade payable claim, Greatech Integration (M) Sdn. Bhd., based in Penang, Malaysia, with a $1.53 million trade payable claim, and Barry L. Leonard and Co. Inc., based in Winston-Salem, N.C., with a $1.36 million trade payable claim.

The Lordstown, Ohio-based electric vehicle maker filed Chapter 11 bankruptcy under case number 23-10831.

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