The CEO of Canoo is shopping for almost all the defunct EV startup’s belongings out of chapter, in response to a courtroom filing.
A brand new entity managed by the CEO, Anthony Aquila, has supplied 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 last 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 offered greater than a handful of its electrical vans to authorities entities like NASA, america Postal Service, and the Division of Protection, earlier than it failed.
Canoo has instructed the courtroom 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 “larger and higher provides” for the corporate’s belongings earlier than a deadline of March 28, in response to a submitting.
However the chapter trustee wrote within the submitting that the “greatest plan of action” could be to proceed with the sale to Aquila. The trustee cited various causes for this, similar to 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 identify them particularly) has produced a “glut of EV associated belongings” which are 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 crucial to keep up the integrity of the belongings.”
So long as it goes by means of, Aquila’s new entity — referred to as WHS Vitality Options, Inc. and created in Delaware — will obtain Canoo’s manufacturing gear, accomplished autos, mental property, contracts, and different stock and belongings. WHS Vitality Options isn’t taking up any of Canoo’s leases, and won’t be liable for any of the claims different collectors have in opposition to Canoo’s property.
Aquila has instructed the chapter trustee {that a} “principal motivation” for getting the belongings is the CEO’s “need to honor [Canoo’s] dedication to supply 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 businesses that until they are often assured that the Purchaser can present assurance promptly that will probably be capable of proceed to supply the providers and help offered by the Debtors, the packages can be materially delayed and the federal government must start the time-consuming means of looking for and qualifying different contractors,” the trustee wrote within the submitting.
CEOs or founders attempting to purchase up the belongings of their bankrupt startups isn’t unusual, even on this planet of electrical autos. In 2023, the previous CEO of bankrupt EV startup Lordstown Motors bought most of its assets and began a brand new firm referred to as LandX Motors. However as a rule, the belongings get offered 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 embody automotive provider Magna (owed almost $3 million), and monetary advisors Yorkville (which offered tens of millions of shares of Canoo inventory and are owed $7 million) are behind Aquila’s in line to receives a commission again.
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