Commercial electric vehicle startup Lordstown Motors filed for Chapter 11 bankruptcy protection nearly two months after that. warned He was in danger of failing.
In early May, Foxconn Electronics backed out of a $170 million investment in Lordstown. The Ohio company said in a regulatory filing at the time that it received a notice from Foxconn on April 21 that it was in violation of its 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 great doubt that it could continue as a going concern.
Lordstown was in danger of being delisted from the Nasdaq stock exchange because its share price closed below $1 on March 7 and continued to falter after that.
Foxconn told Lordstown at the time that it might cancel its agreement if Lordstown did not resolve the listing issues. Lordstown said in May that it had notified Foxconn, among other things, that it believed the breach allegations were unfounded and that the terms of the investment agreement did not allow Foxconn to finalize the deal after the initial closing.
Lordstown said on Tuesday it has filed a lawsuit against technology company Hon Hai Technology Group and some subsidiaries, including Foxconn. Lordstown said the lawsuit “details Foxconn’s fraud and its willful and persistent failure to meet its business and financial obligations to the company.” Claims that Foxconn’s actions resulted in material damage to Lordstown and its future prospects.
Lordstown said it was also looking to sell its Endurance and related assets. The company said the Chapter 11 restructuring would help the forbearance sale process and speed up the timeline for hearing its lawsuit against Foxconn.
In November, Lordstown announced that it had Receive approval to ship the first batch of its first model, the Endurance Truck.
The trucks are built at General Motors’ old small auto assembly plant in Lordstown, Ohio, near Cleveland, which was purchased in 2021 by a Taiwanese company. Foxconn Technology Groupthe largest electronics maker in the world.
Lordstown said he is entering Chapter 11 with significant money on hand and debt-free.
The company’s stock fell more than 65% before the market opened.