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UPDATED! June 27, 2023
""CNN —Lordstown Motors filed for bankruptcy protection Tuesday, put itself up for sale, and announced a lawsuit against Foxconn, accusing its biggest shareholder and former partner of setting out to “destroy” its business.
The electric vehicle maker, which specializes in pick-up trucks, made a Chapter 11 filing in a Delaware court while simultaneously starting legal action against Foxconn.
In a statement, the company said it was left with no choice after a high-profile tie-up with Foxconn, one of the world’s biggest electronics manufacturers, fell apart. It accused the Taiwanese tech firm of fraud and failing to follow through on promises to invest in the company.
“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,” Lordstown CEO Edward Hightower said in the statement. “We will vigorously pursue our litigation claims against Foxconn accordingly.”
"Lordstown Motors unveils their new electric pickup truck Endurance in Lordstown, Ohio, on October 15, 2020."
"Lordstown Motors stock plunges after dispute with investor Foxconn."
In a statement to CNN, Foxconn dismissed the suit as meritless, saying Lordstown had made “false comments and malicious attacks.” Foxconn said it had been trying to have “constructive negotiations” with Lordstown to help, “in finding a solution to its financial difficulties.” “However, during this time, [Lordstown] has continuously attempted to mislead the public and has been reluctant to perform the investment agreement between the two parties,” it said, without specifying how.
“Foxconn originally hoped to continue discussions and reach a solution that could satisfy all stakeholders, without resorting to baseless legal actions, but so far the two parties have yet to reach a consensus,” it said, adding it reserved the right to pursue its own legal action.
Foxconn shares in Taipei closed down 1.3% Tuesday. Lordstown’s shares tanked 61% in premarket trading, adding to a nearly 84% plunge in its stock price so far this year.
Officially called Hon Hai Technology Group, Foxconn is best known for making iPhones for Apple (AAPL), but has recently made moves toward building electric vehicles. In 2021, it purchased an Ohio factory that Lordstown Motors had itself bought from General Motors in 2019.
Foxconn also agreed to handle the manufacturing of Lordstown’s Endurance electric pick-ups at the site, and to make further investments provided certain milestones were met.
But the partnership appeared to break down earlier this year. In May, Lordstown disclosed that Foxconn said it wanted to back out of making further investments over claims that the automaker had not upheld its end of the agreement.
That impasse left the already struggling automaker on even shakier financial ground. Lordstown warned last month that it could face bankruptcy.""
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