Former Lordstown CEO Given Permission to Buy Back Company Assets for $10 Million

Ohio-based Lordstown Motors has received approval from the U.S. Bankruptcy Court to sell its remaining manufacturing assets to a company owned by its founder and former CEO Stephen Burns for roughly $10 million.

LAS Capital, owned by Stephen Burns, will reportedly receive Lordstown's intellectual property, business data, and any machinery used for manufacturing. However, Taiwan’s Foxconn will retain the factory itself after a financial dispute which ultimately left Lordstown filing for bankruptcy last June. 

However, Burns got out before that. The company’s founder abandoned his role as CEO in 2021 after claims were made that Lordstown has seriously overstated its ability to manufacture vehicles while simultaneously over-hyping the technology involved. Burns eventually sold off his remaining equity in the company.

Following the SPAC merger with DiamondPeak Acquisition Corp. that inflated Lordstown Motors’ valuation in October 2020, Burns owned about 25 percent of the company stock. But he began selling that off in chunks immediately after the lockup period on the IPO expired. It’s estimated he made roughly $60 million from share sales, which include a large sale made just days before Lordstown filed for Chapter 11. 

He’s now buying what’s left of the company via LAS Capital for $10.2 million. 

Lordstowns former CFO, Julio Rodriguez, is also reported to be involved with LAS Capital as a minority owner and manager. She left the automaker at roughly the same time as Burns. 

According to the relevant SEC filing, Lordstown began seeking buyers via court-sanctioned selling entities immediately after filing for bankruptcy in June. The bankruptcy court approved the necessary bidding procedures and received a qualifying bid from LAS Capital LLC. While LAS Capital has no formal affiliation with Lordstown Motors, it didn’t take long for people to notice that Burns was involved. 

With so many EV startups turning out to be little more than legal Ponzi schemes, many felt Lordstown had a real chance of producing something tangible. It had a physical factory it purchased at a massive discount from General Motors and a business plan that ended with all-electric pickups being produced in meaningful volumes. But it all kind of fell apart with Burns somehow managing to pick up the pieces after making a bundle offloading shares. 

The plan for Lordstown Motors’ remaining assets is unknown. However, Automotive News reported on Wednesday that LAS Capital's attorney Jennifer Madden stated that it was not purchasing any Endurance pickup trucks for resale to the public. The business also has no plans to repurchase any vehicles that have already been sold to customers and are subject to recalls from the U.S. Department of Transportation.

[Image: Lordstown Motors]

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