2023-06-27 17:25:38
harming the interests of debtors
The lawsuit stated: “Foxconn, after obtaining in advance the valuable assets it wanted, then proceeded to harm the interests of the debtors, depriving them of cash and thus causing their failure. Instead of building a thriving company benefiting all stakeholders in Lordstown, Foxconn maliciously destroyed the company intention, costing Lordstown’s creditors and shareholders billions.”
Foxconn, in a statement, rejected Lordstown’s allegations and said it “reserves the right to take legal action and to suspend the resulting good faith negotiations.”
The Lordstown collapse is the culmination of several grueling years for electric vehicle start-ups that reached sky-high valuations after reverse mergers, only to fall victim to harsh corrections. The Lordstown file contained assets and liabilities of up to $500 million.
Last November, Foxconn agreed to invest up to $170 million in Lordstown, and he took two seats on its board. The deal provided much-needed capital for the electric car maker, while giving the Taiwanese manufacturer a more stable foothold in vehicle production.
Under the deal, Foxconn purchased a former General Motors plant in Lordstown, Ohio, from the start-up and planned to manufacture the startup’s Endurance truck under a contractual agreement. The breakdown of those arrangements began in January, when Lordstown asked Foxconn to suspend production because the cost of manufacturing the truck exceeded its target selling price of $65,000 and said it would need another partner to share the costs.
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