Major car maker valued at $5.3billion files for bankruptcy with hard deadline set after moving into General Motors space
A MAJOR electric vehicle manufacturer has filed for bankruptcy and is suing one of its partner companies, saying it failed to honor its agreement.
Lordstown Motors, which bought a General Motors plant in Ohio to boost its business, filed for bankruptcy in June of this year.
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The company is now approaching the deadline for bids and auctions.
For Lordstown Motors, September 8 is a tough deadline for bids.
It also plans to auction the shares on September 19, according to Reuters.
The company, once valued at $5.3 billion, was a maker of electric trucks.
Lordstown Motors partnered with Foxconn and said they would give priority to other shareholders in upcoming sales.
They’re suing them now.
“We will aggressively pursue our claims against Foxconn,” Lordstown CEO Edward Hightower said, according to The New York Times.
According to the documents submitted, Lordstown Motors plans not to pay out anything on the 300,000 shares held by Foxconn.
Foxconn is a company based in Taiwan.
The two companies did business when Foxconn bought Lordstown Motors’ manufacturing plant to enter the electric vehicle industry.
Lordstown sued Foxconn, claiming the company had reneged on its agreement after it announced it would invest $170 million.
They also alleged that Foxconn caused multiple delays that impacted their business and contributed to their bankruptcy.
According to The New York Times, Foxconn claims that Lordstown Motors “has continually attempted to mislead the public and has been reluctant to fulfill the investment agreement between the two parties according to its terms.”
Despite its promising start and value, Lordstown Motors only manufactured 80 trucks.
The company has been contacted for comment.