Lordstown Motors delays bid deadline again
LORDSTOWN — For the second time in seven days, Lordstown Motors Corp. on Tuesday extended the deadline for interested parties to bid on the troubled electric-vehicle company’s assets.
The notice filed in U.S. bankruptcy court in Delaware pushes the bid deadline back four days to 5 p.m. Friday.
A previous notice, filed Sept. 12, extended the bid deadline to Monday from Sept. 8, the original bid deadline approved in August by Judge Mary F. Walrath, who is overseeing the Chapter 11 bankruptcy proceeding.
Moving the bid deadline also modifies when Lordstown Motors is required to let all qualified bidders know on the highest or otherwise best qualified bid to Sept. 26. The previous deadline was Sept. 12.
The company is allowed to modify dates in its schedule of bidding and auction procedures under the same August judge’s order.
On Aug. 3, Thomas E. Lauria, an attorney with White & Case LLP, the lead firm representing Lordstown Motors, said 13 parties showed an interest in acquiring all or some of the company’s assets.
Four were to acquire all or most of Lordstown Motors’ assets as a going concern; four were for different components of the company’s assets; and five were from liquidators interested in buying some or all of the assets for either an upfront cash fee or for a fee and shared participation in proceeds of their sale, he said.
“I will tell the court that some of these proposals have big issues and problems, and some are more promising,” Lauria said.
A “going concern” is an accounting term used to describe a business that is expected to remain in operation.
Tuesday’s motion does not address other important dates, including an auction, if needed, a sale hearing or sale closing. The previous notice set an auction for Sept. 27; the sale hearing for Oct. 18; and sale closing for Oct. 31.
A key date that has passed was Aug. 24, the deadline for a stalking horse bidder to come forward. None did.
A stalking horse bid is the initial bid for a company’s assets. The stalking horse bidder sets the low end of the purchase price.
Lordstown Motors filed for Chapter 11 protection June 27. The same day, it sued former business partner Foxconn, claiming fraud and bad faith by the Taiwanese technology and electronics giant led to the bankruptcy.
Foxconn called the depiction that Lordstown Motors is the victim of a fraud a “fictitious narrative” Lordstown Motors created “solely for the purpose of obtaining a tactical litigation advantage,” a court document states.
Foxconn then asked Walrath to either dismiss the Chapter 11 case or convert it to Chapter 11. Walrath on Aug. 28 dismissed Foxconn’s request and allowed Lordstown Motors to proceed in Chapter 11.
Foxconn acquired its auto assembly facility in Lordstown from Lordstown Motors for $230 million in May 2022. The purchase agreement also called for the two to partner to develop electric-vehicle programs, but that was later changed to a $170 million equity investment agreement.
The companies closed on $52.7 million of the $170 million in November, but that was all. In April, Lordstown Motors received a delisting notice from Nasdaq that stated the company’s stock had fallen below the minimum bid price requirement of $1 per share for 30 consecutive trading days.
That triggered a letter from Foxconn stating it believed Lordstown Motors, because of the notification from Nasdaq, had breached the investment agreement.
Foxconn then told Lordstown Motors it wouldn’t close on a second $47.3 million stock purchase included in the agreement because of the breach. Lordstown Motors then sued.