Lordstown Motors, the electric vehicle manufacturer, filed for Chapter 11 in a Delaware court while pursuing legal action contemporaneously against Foxconn, its biggest shareholder and former partner. Foxconn has a stake of about 8.4% in the company and are best known for making iPhones for Apple. The claim arose from allegations that Foxconn set out to “destroy” Lordstown Motors’ business. Moreover, accusations of fraud and failure to execute promises to invest in the company contributed to the suit and Chapter 11 filing. Foxconn, dismissed the suit as meritless, stating the comments were false. Further, Foxconn maintains Lordstown was reluctant to attempt a constructive negotiation between the two parties and continues to mislead the public.
Despite the pending lawsuit, Lordstown has been dealing with financial matters when it cited cash flow issues that prevented commercial manufacturing in 2021. Additionally, Lordstown faces competition from other companies like Ford, which sell electric pick-ups to fleet and retail customers. Nevertheless, in addition to its ongoing efforts in electric car making, the firm has brokered arrangements with multiple electric carmakers, such as Fisker, a California startup, to build a small affordable car called the Pear at the Lordstown factory.
Source: Lordstown Motors files for bankruptcy and sues former partner Foxconn | CNN Business