Steve Burns, the executive who launched Lordstown Motors but had to resign under a cloud in 2021 for misleading investors over how many electric pickup orders it had actually received, has agreed to buy the remains of his former company out of bankruptcy court.
Burns, through his entity LAS Capital finalized a deal to pay Lordstown $10 million in cash for most of the company’s completed vehicles, its hub motor and battery module assembly lines, other machinery, intellectual property and related assets. LAS Capital, which Lordstown Motors also said in a regulatory filing includes former CFO Julio Rodriguez is “one of the indirect managers,” has deposited a $1 million down payment and pledged to pay Lordstown another $4 million if it breaches certain terms of its purchase plan. Like Burns, Rodriguez resigned in 2021, following the company's admission that it had mislead investors.
Burns and Rodriguez both left the company in June 2021 after an internal investigation found that he and other executives had implied that general statements of support for the Endurance truck then in development were actually pre-orders for the vehicle. Burns owned about a quarter of Lordstown’s stock at the time but liquidated those shares before the company filed for bankruptcy protection in late June.
Lordstown struggled, as have several other electric vehicle startups, to ramp up its operations and bring the Endurance to market in serious numbers. After launching commercial production in the third quarter of last year, it delivered just 33 of its trucks focused on commercial users this spring. The executive teams that took over from Burns and Rodriguez partnered with Foxconn nearly 18 months ago in a deal that had the contract manufacturer buy Lordstown’s former General Motors plant and pledge additional financial support to get the startup to scale. But the partnership soured before it could truly materialize and the two sides are now in court.
LAS Capital’s plan to buy most of Lordstown’s assets will get a sale hearing Oct. 18. The $10 million offer—which amounts to about 0.5% of Lordstown’s market capitalization around the time Burns exited the company—was the only bid that met the auction parameters laid out by Lordstown’s board of directors. In their regulatory filing, company officials said they had “received several non-binding proposals for the purchase of specified assets” but called off the planned auction when LAS Capital’s offer was the only one to qualify under the bid procedures.