The CEO of Canoo is shopping for practically all the defunct EV startup’s belongings out of chapter, in line with a court docket submitting.
A brand new entity managed by the CEO, Anthony Aquila, has provided to buy “considerably all” of the belongings for $4 million in money. The sale can even wipe clear a more-than-$11 million debt Canoo owed to a monetary agency run by Aquila, which loaned cash to the startup throughout its ultimate months.
The sale proposal comes simply six weeks after Canoo filed for a Chapter 7 chapter liquidation in Delaware and wound down its enterprise. The startup, which went public in 2020 as a part of a merger with a particular goal acquisition firm, by no means bought greater than a handful of its electrical vans to authorities entities like NASA, the USA Postal Service, and the Division of Protection, earlier than it failed.
Canoo has informed the court docket that as of February 24 it had round $145 million in belongings and $175 million in liabilities, and round $12 million in money and equivalents. Different events can submit “increased and higher presents” for the corporate’s belongings earlier than a deadline of March 28, in line with a submitting.
However the chapter trustee wrote within the submitting that the “greatest plan of action” can be to proceed with the sale to Aquila. The trustee cited a variety of causes for this, resembling a “lack of financing at present out there” to help EV manufacturing.
He wrote that the failure of different EV startups (like Fisker and Nikola, although he didn’t title them particularly) has produced a “glut of EV associated belongings” which might be out there “at fire-sale costs.” He additionally wrote that Canoo’s property doesn’t have the cash to cowl “rents, safety prices, and insurance coverage essential to keep up the integrity of the belongings.”
So long as it goes via, Aquila’s new entity — referred to as WHS Vitality Options, Inc. and created in Delaware — will obtain Canoo’s manufacturing gear, accomplished automobiles, mental property, contracts, and different stock and belongings. WHS Vitality Options will not be taking up any of Canoo’s leases, and won’t be answerable for any of the claims different collectors have towards Canoo’s property.
Aquila has informed the chapter trustee {that a} “principal motivation” for purchasing the belongings is the CEO’s “need to honor [Canoo’s] dedication to offer service and help for sure authorities packages.”
“Whereas the viability of all authorities spending is at present unsure, the Purchaser has been suggested by these companies that except they are often assured that the Purchaser can present assurance promptly that will probably be capable of proceed to offer the providers and help supplied by the Debtors, the packages will likely be materially delayed and the federal government should start the time-consuming technique of in search of and qualifying different contractors,” the trustee wrote within the submitting.
CEOs or founders making an attempt to purchase up the belongings of their bankrupt startups will not be unusual, even on the planet of electrical automobiles. In 2023, the previous CEO of bankrupt EV startup Lordstown Motors bought most of its belongings and began a brand new firm referred to as LandX Motors. However as a rule, the belongings get bought to different corporations or auctioned off in items.
It’s unclear what Aquila plans to do with Canoo’s belongings if he’s profitable in finishing the transaction. The Canoo CEO didn’t reply to a request for remark.
Solely Aquila’s monetary agency and associated entities held “secured” claims, which means their debt was backed by collateral pledged by Canoo. The money owed owed to its many different collectors — which embrace automotive provider Magna (owed practically $3 million), and monetary advisors Yorkville (which bought thousands and thousands of shares of Canoo inventory and are owed $7 million) are behind Aquila’s in line to receives a commission again.
