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LORDSTOWN -- The U.S. bankruptcy court judge in Delaware hearing Lordstown Motors Corp.'s bankruptcy case has approved the schedule of bidding and auction procedures for the sale of the troubled electric-vehicle company's assets.
Oct. 5 is the date of the final sale hearing, according to a timetable approved by Judge Mary F. Walrath, who also set 5 p.m. Aug. 24 as the stalking horse bid deadline.
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.
Objections to the stalking horse bid must be filed within five days of its filing.
Other key dates include 5 p.m. Sept. 8 as the bid deadline; and 4 p.m. Sept. 14, the deadline to object to the sale, according to the schedule. If an auction is required, it is scheduled for 10:30 a.m. Sept. 19, and 4 p.m. Sept. 26 is the deadline to object to the successful bidder.
On Aug. 28, Walrath set a hearing on a motion by Foxconn to dismiss Lordstown Motors' bankruptcy case or convert it to Chapter 7 liquidation. The same day, she will consider a settlement proposal between Lordstown Motors and Karma Automotive LLC, the California-based company that sued Lordstown Motors, claiming Lordstown Motors stole trade secrets and poached employees.
The settlement agreement is for $40 million. Karma was seeking more than $900 million.
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, Lauria said.
A "going concern" is an accounting term used to describe a business that is expected to remain in operation.
"I will tell the court that some of these proposals have big issues and problems, and some are more promising," Lauria said.
Then, Lauria said, none of the proposals had been eliminated from consideration, but the company was working with the parties and responding to their questions.
Lordstown Motors had sought a quicker path to sale, originally proposing Aug. 17 as the stalking horse bid deadline; Aug. 24 as the bid deadline; and a sale hearing for Sept. 12, according to documents in the case.
Lordstown Motors sued Foxconn on June 27, the same day it filed bankruptcy, claiming fraud and bad faith by Foxconn 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," the filing states.
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.