Lordstown Motors has filed for Chapter 11 bankruptcy protection and is up for sale. The move comes as Lordstown could not resolve a dispute with Foxconn over a promised investment.
In addition to all of that, the company also announced legal action against Foxconn. Per the complaint filed in bankruptcy court, Lordstown accuses Foxconn of fraudulent conduct and a series of broken promises over a $170 million investment.
Foxconn currently holds around 8 per cent of Lordstown, but the company agreed to purchase additional shares per Reuters but did not follow through on the agreement.
Foxconn believes that Lordstown breached the investment agreement when the struggling automakers’ stock fell below a dollar.
As a result of the announcement, Lordstown stocks were plummeting and were down over 60 per cent pre-market open.
Lordstown has struggled since going public in 2020. The automaker has seen senior leadership leave, investigations via the US Department of Justice, and other issues.
However, the company has some assets that could attract domestic or foreign buyers. First of all, Endurance is a US-made EV truck. Secondly, and most importantly, Lordstown has an operational EV assembly plant located in Ohio. So, whether you are a new entrant or a traditional OEM, Lordstown might be a company ripe for purchase.