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LMC seeks to buy back 35 Endurance trucks

Offering owners 50% of vehicles’ cost

LORDSTOWN — Bankrupt Lordstown Motors Corp. wants to buy back and decommission up to 35 of the company’s flagship vehicles — the battery-powered Endurance pickup truck — previously sold to customers.

Doing so, according to a filing in the company’s Chapter 11 bankruptcy case, would be in the best interest for the company, its stakeholders and the customers to “limit or eliminate potential future warranty and regulatory liabilities.”

The pending motion would authorize, but not direct Lordstown Motors to move on reacquiring the trucks for up to $1.08 million. Foxconn, which manufactured the trucks for a short period at its auto assembly plant in Lordstown, has agreed to pay or reimburse.

Foxconn, the filing states, would reimburse 50% of the cost of vehicles actually repurchased by Lordstown Motors with a cap of $31,000 per vehicle.

A hearing on the motion is scheduled for Dec. 11 before U.S. bankruptcy court Judge Mary F. Walrath in Delaware. Objections are due by Tuesday.

Under a May 2022 contract manufacturing agreement between Foxconn, the Taiwanese technology and electronics giant, and Lordstown Motors, 80 Endurance trucks were made, 37 of which were sold to customers, according to the filing.

The trucks not sold to customers were sold to LandX Motors Inc., an affiliate of LAS Capital Inc., which was formed by Lordstown Motors founder and former CEO Steve Burns, as part of LAS Capital Inc.’s acquisition of certain Lordstown Motors assets in a deal for $10.2 million that finalized in October.

Lordstown Motors stopped producing the truck after it filed for bankruptcy protection June 27.

The court in July agreed to allow the company to continue to honor its warranty program, service for which was done either by a third-party or Lordstown Motors.

The asset purchase included “assets critical to complying” with Lordstown Motors’ regulatory obligations through the National Highway Traffic and Safety Administration (NHTSA) and other federal motor vehicle safety standards.

Also, after the sale closed Oct. 27, Lordstown Motors terminated many of the employees needed to comply with the regulatory obligations.

As a result, and with the expected confirmation of a plan to reorganize that Lordstown Motors wants to happen by the end of 2023, the company “will have no means to fulfill their warranty, recall and other obligations to their customers and / or NHTSA” after the plan becomes effective, the filing states.

“Accordingly, future costs of service and repair will be borne by” Lordstown Motors’ customers, it would be unlikely the company could comply with regulatory obligations if any materialize and Lordstown Motors would face “negative regulatory consequences and significant claims as a result,” the filing states.

Lordstown Motors has gotten a short-term extension of its product liability insurance policy, but a longer-term extension or renewal is either not possible or “prohibitively expensive,” the filing states.

In addition to reimbursing Lordstown Motors for one-half of the cost to repurchase the vehicles, Foxconn will share in 50% of the net proceeds from any resale of the vehicles or parts.

“For the avoidance of doubt, the vehicles will be decomissioned and not resold to any third-party that intends to use the vehicle for an on-road purpose,” the filing states.

During the brief time the trucks were on the market, Lordstown Motors self-reported three recalls to the NHTSA. Recalls in February and March were because of supplier parts quality issues and a third in April was because of a software malfunction.

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