Lordstown Motors files Chapter 11

Lordstown Motors Corp., the Ohio-based original equipment manufacturer (OEM) of electric light-duty vehicles focused on the commercial fleet market, has announced a strategic restructuring process to maximize the value of its assets: its on-the-road Endurance all-electric (EV) pickup truck and the intellectual property, platform and people that developed it.

As part of the process, Lordstown filed litigation against Hon Hai Technology Group and some of its affiliates, including Foxconn Ventures Pte. Ltd., in the United States Bankruptcy Court for the District of Delaware. The litigation reportedly details Foxconn’s failure to live up to its commercial and financial commitments to the company. According to Lordstown Motors, Foxconn’s actions led to material damage to the company as well as its future prospects.

Lordstown has also started a marketing and sale process for the Endurance vehicle and related assets. To accomplish this expeditiously and provide a prospective buyer with a going concern asset free and clear of any legacy issues, Lordstown is restructuring under Chapter 11 of the U.S. Bankruptcy Code. Lordstown said it anticipates that the restructuring will enable an expedited timeline for hearing its litigation against Foxconn.

“As one of the early entrants to the EV industry, we have delivered the Endurance, an innovative and highly-capable EV with significant commercial and retail potential – and had subsequently engaged with Foxconn in a purposeful, strategic partnership to leverage this expertise into a broader EV development platform,” said Edward Hightower, CEO and president of Lordstown. “Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown’s assets for the benefit of our stakeholders. We will vigorously pursue our litigation claims against Foxconn accordingly.”

The Lordstown Endurance commercial pickup on the floor during the Work Truck Week show in Indianapolis in March 2022. (Photo: Chad Elmore)

Under the partnership with Foxconn, in 2021 Lordstown agreed to divest its Lordstown, Ohio, factory along with its manufacturing and operational employees. Contractual assurances reportedly said Foxconn would support the Endurance truck and follow through on a joint vehicle development program. That has not occured, said Lordstown.

According to Lordstown Motors, the Endurance is a fully homologated and certified, production-launched vehicle that can serve as a springboard for the right OEM or other strategic purchaser into the broader North American EV full-size truck market at a fraction of the cost and time it would take to develop a program from the ground-up. The company said it is confident that a buyer could utilize the Endurance platform to create multiple EV variants and take the product to the next level.

In addition to the Ohio plant, Lordstown Motors has engineering, research and development facilities in Farmington Hills, Mich. and Irvine, Calif.

“We remain confident that an orderly, expedited sale process will maximize value for our stakeholders and enable the talent and technology behind the Endurance to find new and supportive ownership,” said Hightower. “While in Chapter 11, Lordstown will continue to support our customers. We are grateful for the Lordstown team for their commitment and dedication to our vision and to our customers, suppliers and business partners for believing in the Endurance and in the EV evolution.”

Additional information on the Chapter 11 filing, including access to court documents, is available at www.kccllc.net/lordstown.

Jefferies is acting as financial advisor to the company, and White & Case LLP is acting as legal counsel.