WionDrive News Desk 
Lordstown Motors, the bankrupt electric vehicle manufacturer, has submitted a Chapter 11 plan outlining the distribution of proceeds from its asset sale.
The Ohio-based Lordstown Motors, which filed for Chapter 11 bankruptcy, has presented a plan to repay its debts and shareholders, including Foxconn. The plan prioritizes other creditors if the ongoing asset sale generates sufficient funds.
Uncertain Asset Value
Lordstown’s Chapter 11 plan acknowledges that the value of its assets remains uncertain during this bankruptcy stage and could potentially be valued at zero. The company has set a September 8 deadline for bids on its assets, with an auction scheduled for September 19.
Creditor Prioritization
While the Chapter 11 plan does not specify the exact amount owed to creditors, it states that shareholders will only receive payment after creditors. Earlier court documents revealed debts of approximately $20 million to 30 trade vendors, with an additional $40 million settlement agreed upon to resolve a trade secrets lawsuit with Karma, a rival automaker.
No Compensation for Foxconn
Even if the asset sale generates enough funds for shareholder compensation, Lordstown Motors intends to pay nothing to Foxconn for its 300,000 preferred equity shares. Foxconn, known for assembling Apple’s iPhones, purchased Lordstown’s manufacturing facility as part of its electric vehicle venture.
Legal Dispute with Foxconn
Lordstown Motors had sued Foxconn for failing to fulfill a $170 million investment agreement in its electric truck business. Lordstown alleged that Foxconn had purchased only $30 million of the contemplated preferred equity shares, while also acquiring $22.7 million of common shares in the company, equivalent to about 8.4% of its equity.
Foxconn’s Response
Foxconn, formally known as Hon Hai Precision Industry, has disputed Lordstown’s interpretation of the investment agreement. Foxconn argued that it had rightfully declined further capital infusion into Lordstown’s struggling business. The bankruptcy court rejected Foxconn’s request to dismiss Lordstown’s bankruptcy filing on August 28.
Once valued at $5.3 billion, Lordstown Motors ceased operations after manufacturing only 80 electric trucks.
