“…new and supportive ownership….”
It’s tight there in black and white. Asset sale to salvage something. Not a “partner”.
Ummmm…there’s another lawsuit you’re ignoring. The one where Lordstown is the defendant.
Lordstown Receives Approval of First Day Motions
Enables uninterrupted continuation of business operations and commitments to stakeholders
LORDSTOWN, Ohio, June 28, 2023 /PRNewswire/ -- Lordstown Motors Corp. (Nasdaq: RIDE), ("Lordstown" or the "Company"), today announced that the United States Bankruptcy Court for the District of Delaware (the "Court") entered orders (or indicated it would enter orders) granting approval, on an interim or final basis (as applicable to the requested relief), of all of the Company's "first day" motions filed in its chapter 11 cases (the "Chapter 11 Cases") on June 27, 2023 (the "Petition Date").
Lordstown continues to operate with significant unencumbered cash-on-hand. Additionally, the Court granted interim approval of the Company's first day employee wages and benefits motion, which enables the Company to continue paying all employee wages, salaries, and providing benefits – without interruption. The hearing for final approval of that motion is scheduled for July 27, 2023 at 9:30 a.m. (Eastern Time). Bankruptcy courts routinely grant final approval of the relief requested. The Company can also continue paying suppliers/vendors for all authorized goods delivered and services rendered after the filing date of June 27, 2023.
Following today's successful hearing, the Company is prepared to turn its attention to the expedited marketing and sale process for its assets, including the Endurance assets, as proposed in the Company's motion for approval of that process filed on the Petition Date. The Company is also poised to continue vigorously pursuing its pending litigation against global technology company Hon Hai Technology Group (TWSE: 2317; LSE:HHPD) and certain of its affiliates.
Edward Hightower, CEO & President of Lordstown, said, "We are pleased with the Court's approval of our first day motions, which enable Lordstown to move forward with the elements of our strategic restructuring process, and we can now turn toward preparing to initiate our sale process to maximize the value of Lordstown's assets. I am proud of our team and look forward to continuing to work alongside them as we move into this next phase."
Additional information on the Chapter 11 Cases, including access to court documents and information about the claims process, is available at?kccllc.net/lordstown; by calling the claims call center at (877) 709-4757 (U.S./Canada) or (424) 236-7235 (International); or by emailing firstname.lastname@example.org.
Jefferies is acting as financial advisor to the Company, and White & Case LLP is acting as legal counsel.
Restructuring Process Here's the goods.
Files Complaint Against Foxconn that Details Fraud, Bad Faith and Repeated Contractual Breaches Leading to Value Destruction
Commences Comprehensive Sale Process for Endurance Truck and Related EV Assets
Files Chapter 11 to Implement Restructuring in Efficient Manner
Company is Debt-Free and Continues to Operate with Significant Cash-on-Hand
LORDSTOWN, Ohio, June 27, 2023 /PRNewswire/ -- Lordstown Motors Corp. (Nasdaq: RIDE), ("Lordstown" or the "Company"), an original equipment manufacturer (OEM) of electric light-duty vehicles focused on the commercial fleet market, today 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 today filed litigation against global technology company Hon Hai Technology Group (TWSE: 2317; LSE:HHPD) and certain of its affiliates, including Foxconn Ventures Pte. Ltd. (collectively, "Foxconn"), in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The litigation details Foxconn's fraud and willful and consistent failure to live up to its commercial and financial commitments to the Company. Foxconn's actions led to material damage to the Company as well as its future prospects.
In addition, and as a consequence of Foxconn's material and irreparable harm, Lordstown is commencing a comprehensive 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 that is free and clear of any legacy issues, Lordstown is restructuring under Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11") in the Bankruptcy Court. Lordstown further anticipates that the restructuring will enable an expedited timeline for hearing Lordstown's litigation against Foxconn.
Edward Hightower, CEO & President of Lordstown, said, "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. 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."
Foxconn's Fraud, Bad Faith and Repeated Contractual Breaches Irreparably Harm Lordstown According to Complaint
The complaint filed against Foxconn centers on a transformative, strategic partnership Lordstown's management team entered into with Foxconn to combine Lordstown's innovation, technology, accomplished vehicle engineering team and manufacturing facility in Lordstown, Ohio with Foxconn's resources, supply chain capabilities and position as one of the world's largest electronics manufacturers with stated significant automotive capabilities to form a new, scalable joint vehicle development platform.
Under the partnership, Lordstown agreed to divest its most valuable assets to Foxconn, namely its Lordstown, Ohio manufacturing facility, which is one of the largest in North America, along with its highly talented and experienced manufacturing and operational employees. The up-front purchase price for the Lordstown manufacturing facility reflected the expected benefits of the contractual assurances from Foxconn that Foxconn would support the Endurance pickup truck in a variety of ways and follow through on a joint vehicle development program, leveraging what was purported to be Foxconn's established and extensive EV ecosystem and meeting its commitments to the Lordstown community.
The lawsuit details the fact that Foxconn had no intention of living up to its commitments, particularly with respect to the new vehicle development platform. As the lawsuit describes, Foxconn simply used its variety of contractual arrangements with the Company as a tool to maliciously and in bad faith destroy Lordstown's business—while leveraging resources gained through the partnership to advance its own business interests.
Chapter 11 to Maximize Value of Lordstown's Assets
In addition to the decisive action Lordstown is taking to redress Foxconn's tortious conduct, it seeks to maximize the value of the Company's assets and efficiently resolve its contingent liabilities through a Chapter 11 restructuring process. Lordstown has filed motions with the Court seeking authority to commence a comprehensive marketing and sale process under section 363 of the U.S. Bankruptcy Code to realize the full value of its innovative Endurance vehicle and related assets. 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 is confident that a buyer could utilize the Endurance platform to create multiple EV variants and take the product to the next level.
To ensure a smooth transition into Chapter 11, the Company filed with the Court a series of customary "first day" motions to continue operating the business and uphold its commitments to stakeholders during the process. The Company expects to receive approval of these routine "first day" requests in short order. The Company enters Chapter 11 with significant cash on hand and is debt-free.
Mr. Hightower said, "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. 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.
Don’t forget the suit where Lordstown is the defendant. That will really tie up whatever $$$ RIDEQ gets from selling its assets.
Lordstown is bankrupt. They are in bankruptcy, so bankrupt is a proper term. That cannot be argued. However, if you are using the term that indicates that being bankrupt means they have no cash, then I agree with that. However, bankrupt is a proper term for this condition, though I appreciate you may mean the term in a different way..
Lordstown, according to the filings, and the FAQ form the company, is not producing vehicles for new customers.
Given that this is an auction, and the FAQ says that they want to sell the whole company as a whole, I would say that part of what you say is a half-truth. They are liquidating, as that how it reads to me, but that doesn't mean that they are simply selling the pieces like what Blockbuster had to do under Chapter 7. This is chapter 11, and from my reading, I agree mostly with your point about Lordstown Motors calling the shots. That's somewhat true under the constraints of chapter 11, which is bankruptcy.
As for the suit against Foxconn, I haven't looked at that very closely, but that will tie up the cash left over and will prevent any cash distribution to shareholders until the legal actions are completed, one way or the other. So, if you are waiting for cash distribution to shareholders, you will have to wait. It does look like that there should be cash left for the shareholders, which is rare for stocks in this condition.
You don't seem to grasp that a sale of the assets is NOT a "partnership". But that's OK...it will become clear enough for even the most dense RIDEQ "investors" to see.
Lordstown sold the plant to Foxconn already that went south
and why Foxconn was sued. The next sale will be to a new
partner and not liquidation.
Foxconn will not be able to produce the Fisker Pear in the
Lordstown plant without Lordstown Motors who currently owns
the plant, employees, and is paying the bills.
Lordstown Motors is calling the shots and is not banktupt.
Lordstown has 13 offers on the table for a new partnership.
The dip shit spreading FUD is only here for "entertainment"
like his profile suggests and why I have the loser on ignore
as the twit knows nothing about nothing
It's really awful to see this happening and to realize so much money has been lost. This will take years, if ever, to recover from. Steven Burns said there were 100k "firm preorders", he said they would be in production by September, 2021, he said the factory building was a $1B asset. NONE of those things are true, and in fact, the preorders appear to have been a complete lie. All of his actions were fraudulent, lives are ruined by this, and he is walking free.
This is not the way it should work in America.
From my reading, you are correct that this is chapter 11 liquidation. However, it is chapter 11 and not chapter 7. While the courts do oversee the liquidation, Lordstown has a fair amount of control.
The bankruptcy filings suggest that there are assets or funds available for unsecured creditors. In this case, it is possible, and maybe even probable that stockholders will receive something from the liquidation. The best case scenario, which I don't know if it is available, that the company is bought including the stock. I don't know what the value per share would be, but that would be an interesting option, if available. Otherwise, it could be a cash transaction and the sense I get is that shareholders will be in line to get some cash.
However, they are probably required to take the best value for the creditors, and if that means selling parts of the company and not the company as a whole, they may be required to do that. I think we have to wait for the auction in October to find out these details.
I've seen a few bankruptcies, and this one seems to be a little different. I wish the shareholders luck. The ones I was involved in didn't not turn out well, as there was nothing left for the shareholders in those cases.
Here's an idea for a new direction for RIDEQ. Having some experience with q stocks. The ultimate reality is no matter what one thinks, there aren't a lot of investors that would waste their time or money on qs. So when this thing drops to 1/ 100 penny it'll be hard too find an appropriate audience to pitch a new direction for the company. But if we targeted a new audience and develop a new product. Let's face it the SUV hasalready been done. Here's what RIDEQ should do, they need to develop a wind and solar powered rolling meth lab motor home with inboard hub motors. Hire some rappers to declare owning one, too be an absolute must when pulling up to the club. Brand it as the new status symbol. Nikola raised 20 billion market cap with just a color brochure and an oversized push toy. Just park it and up pops a retractable windmill, full fridge full of grape kool-aid, air conditioning and a pop up turret with a Gatlin gun. Now who would be the perfect market for this new innovation. Homeless people living in tent cities across America Just think if you were living in a 110' F tent and just shot your last bag of meth. What would be the ultimate dream. You got it!, a wind and solar powered rollin meth lab motor home with a fridge full of grape Kool-aid. Just think you'd be the king of the neighborhood. They could all feel like accomplished investors bragging about their stock holdings. That's my idea for the next rideq.
RIDEQ has put its assets up for sale. Via Chapter 11. Overseen by a bankruptcy court judge. There’s no getting around it.
RIDEQ “investors” will get whatever is left of the proceeds. Maybe.
RIDEQ will sell its assets, iF it can find a legitimate buyer. The. It will have to fight the lawsuit where RIDEQ is the defendant. The lawyers will get paid before RIDEQ “investors”.
This will be an epic I-told-you-so event. Hope you stick around to hear it from me.
Short selling shares are dried up and ends today.
Rothchild Banks and Hedge Fund manipulation is over.
Broker Dealers are finding out the hard way how the new QFS operates.
You can no longer sell what you don't own, come next week. Margin Calls coming.
Look how they undercut the ask with tiny amounts. It's over!
Watch how bad they burn next week and into the future.
Like they did with Foxconn that went south.
LMC through the courts, got all the assets back from breach of contract.
Lordstown Motors then got the Plant and Employees back
and even produced 80 Endurance Trucks since then.
It's in the filings. dip shit. FUD Is back on ignore.
RIDEQ is selling its assets. Plain and simple. Whether any of the money from that sale or sales accrues to SHMP “investors” is the question.
Sucks to own shares in company that went Chapter 11 and has to rely on the good graces of the BANKRUPTCY court judge.
No shit, like they did with Foxconn dipshit.
Knowledge is power.
Still not aging well. Based on what you posted, shorts are potentially making $$$ off RIDEQ's financial quagmire.
RIDEQ is selling its assets...or trying to. Once that's done, RIDEQ "investors" MIGHT get some of the leftover crumbs. That's it. RIDEQ will be a shell to be pimped out to some private company looking to go public.
I don't understand how, when RIDEQ says they're selling their assets, RIDEQ "investors" don't think RIDEQ is selling their assets. It's all there in the filings, SEC and BANKRUPTCY court.
No it's not. Foxconn will be replaced with a new buyer just like Foxconn was a buyer who didn't fulfill it's agreement short term.
There is NO liquidation and Foxconn still has plans with Fisker to produce the Pear at the plant.
Lordstown doubled it's production last quarter from 40 to 80 Endurance Trucks and is still in operation and production.
I believe Foxconn will still try to work out a plan as Lordstown continued to produce without Foxconn and Foxconn has the most to lose with Fisker on the back burner.
Lordstown Motors will prevail in the Lawsuit against Foxconn for fraud and planned sabotage with a parts supplier from Taiwan, causing LMC two self proclaimed recalls.
This isn't over and LMC can very well end up with Foxconn's assets when it's said and done. LMC currently operates the plant and pays the bills without Foxconn.
Nobody is liquidating and LMC didn't liquidate when they first sold the plant to Foxconn. Foxconn went south on the agreement, not LMC.
It's all in the filings for crying out loud. SMH
I agree. I've seen 1 case there a payout happened, and one company not in bankruptcy but liquidated like it was that did also provide a small payout to the shareholders. That's not very many. I've had a couple of stocks go chapter 11 on me, and that was not good news. This one may be different, but that would make this an exception. I am not following BBBYQ's stock, so I can't make comparisons there (though I know it wasn't you who made the comparison).
You got that right. You might want to drop into the BBBYQ board and see what delusional folks are realizing just today, after today’s 8K made it absolutely clear that the common stock shareholders could be “extinguished” as early as tomorrow but absolutely by Sept 30, 2023.
It’s sad to watch.
Can’t fix stupid
Unfortunately, in ever case I've been involved with, the commons get wiped out. In my younger years I was always getting in on these type of deals. Being older the truth seeps in. There's a reason the fiduciaries don't get involved with q's that's because it's the commons chopping block.
RIDEQ is in bankruptcy court TRYING to liquidate its assets. But it’s extending the deadline because it sounds like no one of any real financial substance is interested.
A “going concern” is an accounting term used to describe a business that is expected to remain in operation.
Sep 20, 2023 Lordstown Motors delays bid deadline.
Excellent post. Expect massive blowback for sharing some truth about RIDEQ.
Looks like the shorts are doing well This is a bankrupt company after all.
Before you object to the term bankrupt, the company has filed chapter 11, bankruptcy protection. Therefore the term bankrupt is proper, by definition. However, I understand you may be using the term differently.
It is possible for profitable companies to file for bankruptcy. Profitable doesn't mean cash flow positive. However, I've never seen a public company in this condition. RIDEQ certainly isn't in this condition. Chapter 11 can be reorganization or liquidation. Chapter 7 is only liquidation. I suspect that you point is that the company has cash and is able to meet expenses except for production of vehicles (more on that later). Therefore, if this company were liquidated, there would be cash left over for the creditors, and even the shareholders including Foxconn. That is a reason to be bullish on the stock, if you think the asset value for the shareholders is greater than the stock price. The question is what will happen to this company. In October there is an auction for either the whole company or the assets. They are hoping to sell the whole company and have the highest value for the existing shareholders. I believe they said that in the FAQ about the bankruptcy (chapter 11 is bankruptcy). If they sell the company as a whole, it will either result in shares in the new company, or a cash transaction. I don't think in this process that the shareholders will get $0, though I haven't run the numbers. I've seen other companies go chapter 11, and in the end have a cash distribution to the shareholders. I think that is on the table. However, with the auction, this does read like liquidation and not simply protection or reorganization.
With regards to production of the trucks. They have ceased production. However, reading the FAQ, that requires some clarification. If you ordered a truck before they filed chapter 11, then they will still make the truck or perhaps have, by now, already made the truck. If you called them today to ask for a truck to be made for them, they won't make it. I haven't read anything to the contrary.
If the truck is a good product, and you say that it is, then it is probable that someone will make the trucks. It is possible also that shareholders will benefit from the continued production. It is also possible that they won't. Too many variables at the moment. It depends on who buys the company or the assets.
I've seen the debate here, and I'm not sure I understand the disagreement about bankruptcy, unless it's a disagreement in the terms as I described it above.
Anyway, good luck.
This didn’t age well.
SHMP is in bankruptcy court. It’s the perfect target for shorts because RIDEQ “investors” fail to grasp the seriousness of RIDEQ’s financial condition.