It’s been one problem after another for Lordstown Motors.
The Ohio based EV company recently revealed that a partnership with Foxconn that intended to save it would actually result in bankruptcy.
But it’s how quickly that bankruptcy is permitted to take place that’s now the issue at hand.
After a fumbling Lordstown took a lifeline from Taiwan-based electronics company Foxconn, it was with the plan that two partners would advance the development and production of the Lordstown Endurance pickup truck. Instead, a disagreement between the two sides over funding led to a public spat, some lawsuits and, ultimately, Lordstown’s filing for Chapter 11.
At the time of the June filing, Lordstown said it hoped to sell its Endurance vehicle and related assets, but a recent ruling by a judge may put that ambition out of reach.
According to Reuters, U.S. Bankruptcy Judge Mary Walrath has rejected Lordstown’s request for a quick bidding procedure that would allow bankruptcy to close by September. And the reason is because there is pending litigation against Lordstown the judge believes needs to play out before Lordstown sells anything.
That’s because Lordstown is being sued by California-based EV maker Karma for allegedly poaching its employees and stealing IP that Lordstown is accused of using in its infotainment systems.
That case had reportedly been scheduled for trial in September before Lordstown’s bankruptcy placed it on hold, but Judge Walrath said at the court hearing that "The critical issue in this case is whether the debtors own the property that they want to sell.” She also added that the September deadline “appears to be designed solely to get this done before a Karma decision can be made in the California litigation.”
According to Reuters, Karma believes the evidence that Lordstown is using its proprietary technology is “overwhelming” and is pleased with the ruling allowing it to proceed to trial.