Suit claims Lordstown Motors owes $2.5M
Mich.-based business claims automaker broke industrial services pact
LORDSTOWN — Startup electric truck company Lordstown Motors Corp. owes a Michigan-based firm $2.5 million in unpaid bills, according to a lawsuit pending in Trumbull County Common Pleas Court.
DTE Lordstown LLC claims Lordstown Motors broke an industrial services contract the Ann Arbor, Mich., company terminated in August, when, the suit states, Lordstown Motors was already $904,000 behind on its bills.
The parties agreed in February that DTE Lordstown would perform utility-related work at Lordstown Motors’ plant, the former General Motors assembly plant, but quickly fell behind, owing $427,451 by April; $537,107 by May; and $722,578 by June.
The work was at the plant’s central utility complex, waste water treatment plant and project site, where utility services could be performed, the lawsuit states. It included making rounds, taking equipment readings, and scheduling and overseeing contractor maintenance work.
“LMC has not disputed any of the invoices or accounts at issue in this case,” attributing its delinquency to “delays in fundraising efforts,” the suit states. “But it has repeatedly promised to pay them.”
An email seeking comment was sent to Lordstown Motors’ public relations firm.
The parties arranged for Lordstown Motors to make $40,000 weekly payments to catch up to its debt, and the company committed to clear up the full arrearage by May 29. It made payments on April 20 and May 14, but did not on May 7 and May 21. By the end of May, the company owed $722,578, of which $537,107 was past due, the lawsuit states.
Lordstown Motors also missed a promised payment on June 3, one day after the parties discussed the late bills, the lawsuit states.
DTE sent its contract termination notice in June to end the contract on Aug. 14.
Lordstown Motors on June 25 paid DTE Lordstown $642,578 as partial payment for four unpaid invoices, paid $10,141 for a sixth invoice Oct. 19 and tendered a check on Oct. 28 for invoice No. 5, but conditioned the proposed payment on DTE Lordstown “foregoing all rights” under the agreement, including the more than $2 million contract termination fee, the lawsuit states.
The suit filed Oct. 30 states DTE Lordstown is still owed $181,613 for services and a $2.3 million termination fee.
On Oct. 26, shares of Lordstown Motors started trading on the Nasdaq stock exchange as public company following its merger with special purpose acquisition, or “blank check,” company DiamondPeak Holdings Corp.
The deal was expected to inject $675 million into the company to begin producing its all-electric Endurance pickup truck sometime in the second half of 2021. The truck, which has a sticker price of $52,800 before tax incentives, debuted publicly in June.
Also last month the company revised upward the number of employees it expects to have by next September, from 600 to 800. The company already employs about 230 and another 150 contractors as it continues to retool the plant to begin production.
The case is assigned to Judge W. Wyatt McKay. A hearing date has not been set, according to the court website.