Lordstown Motors (RIDE) files for bankruptcy, sues Foxconn over funding agreement
Lordstown Motors is filing for Chapter 11 bankruptcy and suing Foxconn over allegations that the latter failed to provide agreed funding to the EV manufacturer.
EV manufacturer startup Lordstown Motors looks to be in dire straits this week as the company announced it will be filing for Chapter 11 bankruptcy. That’s not all. The company is looking to take Taiwanese tech manufacturer Foxconn to court over a $170 million USD funding agreement. Lordstown Motors alleges that Foxconn breached the agreement in refusing to provide additional funding to Lordstown, leading to its current predicament. Foxconn claims there was no such breach on its part and looks prepped to meet Lordstown in court.
Lordstown Motors’ situation was reported in a press release on the news corner of its website on June 27, 2023, as spotted by CNBC. Lordstown shared in its statement that it intends to file Chapter 11 bankruptcy as it restructures, and it will attempt to hold Foxconn accountable for alleged breaches of agreements, also hopefully leading to expediting the Chapter 11 process.
Source: Carlos Garcia Rawlins/Reuters
The litigation details Foxconn's fraud and willful and consistent failure to live up to its commercial and financial commitments to the Company. Foxconn's actions led to material damage to the Company as well as its future prospects. In addition, and as a consequence of Foxconn's material and irreparable harm, Lordstown is commencing a comprehensive marketing and sale process for the Endurance vehicle and related assets… Lordstown further anticipates that the restructuring will enable an expedited timeline for hearing Lordstown's litigation against Foxconn.
Lordstown Motors launched in 2019 with support from General Motors, though the latter dumped its stake in 2022. Even so, Lordstown entered into business with Foxconn in 2022 when it sold an Ohio-based factory it purchased from GM to the tech manufacturer.
With Lordstown entering the bankruptcy process it will be interesting to see if the courts uphold the company’s allegations. Stay tuned as we continue to watch for updates in the court battle between Lordstown Motors and Foxconn.
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replyTJ Denzer posted a new article, Lordstown Motors (RIDE) files for bankruptcy, sues Foxconn over funding agreement
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