Back in June 2023, GM Authority reported that Lordstown Motors – the EV startup that bought the GM Lordstown plant in Ohio back in 2019 – filed for Chapter 11 bankruptcy protection after a dispute with Taiwanese electronics manufacturer Foxconn. Now, in yet another twist of fate, Lordstown Motors founder and former CEO Steve Burns has acquired the struggling company’s assets.
Doling out $10 million to buy assets out of bankruptcy, Burns has quite the history with the electric pickup maker when it comes to unusual financial moves. According to a report by FreightWaves, the former CEO claimed roughly 25 percent of Lordstown Motors shares, and began selling shares after a lockup expired. In total, Burns made more than $60 million from selling off his shares, including a large sell-off just before the aforementioned bankruptcy filing.
“It’s just as doomed as ever,” one analyst claimed. “I have no more confidence that Lordstown will gain any market traction than I did yesterday. There’s only soft tooling there. Maybe they could build a couple hundred more trucks, but that’s it. And nobody’s going to buy them.”
It’s worth noting that it’s not entirely clear what assets Burns is gaining, as the Lordstown Motors plant complex itself is owned by Taiwan’s Foxconn.
As a reminder, this recent development is just another aberration in Lordstown Motors’ muddled history. The electric vehicle startup purchased the GM Lordstown plant after General Motors ceased production of the Chevy Cruze at the facility. For selling the plant at a discounted rate, The General was granted roughly eight million shares of Lordstown.
Following a short-seller report in early 2021, General Motors sold its stake in the EV startup, with cofounder and CEO Steve Burns ultimately resigning. Afterwards, Lordstown Motors began acquisition talks with Foxconn, who eventually ended up purchasing the Lordstown plant for $230 million, in addition to investing another $50 million in the electric vehicle manufacturer. The acquisition was completed in May 2022.
The following month, Lordstown Motors filed a complaint in bankruptcy court alleging that Foxconn conducted business in a fraudulent manner.
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Comments
Hmmm. WOW! A CEO who was in charge of a company… drives it in to bankruptcy…Sticks the creditors with the losses…Then turns around and buys the company assets back at a steep discount? Sounds like a standard Trump business strategy from The Apprentice tv show.
Actually that sounds like something Hunter Biden would do!
Nah! Hunter only uses OPM$
Other Peoples Money!
Common practice for many tycoons since the mid 1800’s. What may find out is the last corp mgmt
all bailed with big bonuses before the bankruptcy filing and when I checked, they were all left wing progressives! Go figure! Like the other billionaires out there feeding groups like BLM and other seditionist and subversives.
The only fraud in this is the former CEO who lived large on the hundreds of millions invested by people he duped and then he bailed. Total crook. They were never going to build that truck anyway.
The same plant is suppose to start producing a Fisker EV model in 2024. Does this ex CEO have connecyions with Fisker?
This truck could have done ok, if it wasn’t so ridiculously expensive.
Yeah, it looks dorky and the range sucks. But if it were at least cheap, that would be something.
What a complete scam.
He should be locked up and any money he took from investors and taxpayers should be returned.
Such a shame the bills and debts are paid by the workers and taxpayers.
As long as all politicians let this happen these come artists will repeat this bullshyt
Poor Youngstown Ohio
He could be thinking of selling the hub motor assembly line to another manufacture using the same brand of motor. Aptera comes to mind although they are using a smaller varient.