CANOO CEO purchases almost all of the assets of EV startups that have been repealed from bankruptcy, according to court filings.
Anthony Aquila, a new entity managed by the CEO, has offered to buy “virtually everything” of the assets for $4 million in cash. The sale also wipes out more than $11 million in debt paid to a financial company run by Aquila that lent money to the startup during the last month.
The sales proposal comes just six weeks after the canoe filed a Chapter 7 bankruptcy liquidation in Delaware and discontinued its business. The startup, which was released in 2020 as part of a merger with a special purpose acquisition company, did not sell more than a handful of its electric vans to government agencies such as NASA, the U.S. Postal Service, and the Department of Defense before it failed.
Canoo told the court that as of February 24, it had approximately $145 million in assets, $175 million in liabilities and about $12 million in cash equivalents. According to the filing, other stakeholders can file “higher offers” on the company’s assets prior to the March 28th deadline.
However, the bankruptcy trustee wrote in the application that the “best course of action” was to proceed with the sale to Aquila. The trustee cited several of this reason, including a “currently available funding shortage” to support EV manufacturing.
He writes that the failures of other EV startups (though he didn’t specifically name them, like Fisker and Nicola) produced “oversized EV-related assets” available “at fire prices.” He also wrote that Canoo’s real estate does not have the money to cover “rent, security costs and insurance required to maintain the integrity of the property.”
As long as it passes, Aquila’s new entity is WHS Energy Solutions, Inc. It is called, and is created in Delaware and receives Canoo’s manufacturing equipment, completed vehicles, intellectual property, contracts, and other inventory and assets. WHS Energy Solutions has not taken over Canoo’s leases and is not liable for any claims held by other creditors against Canoo’s real estate.
Aquila told the bankruptcy trustee that the “primary motivation” for purchasing assets was the CEO’s “desire for honor.” [Canoo’s] A commitment to providing services and support to specific government programs. ”
“The viability of all government spending is currently uncertain, but unless buyers can guarantee from these agencies that they can continue to provide the services and support provided by the debtor, the programme will be delayed significantly and the government will need to start looking for other contractors and writing other contractors.
It is not uncommon for CEOs or founders to buy assets from bankrupt startups, even in the electric vehicle world. In 2023, the former CEO of bankrupt EV Startupload Town Motors purchased most of its assets and established a new company called Landx Motors. However, in many cases, assets are sold to other companies or auctioned off in pieces.
It is unclear what Aquila is planning to do with Canoo’s assets if he succeeds in completing the transaction. Canoo CEO did not respond to requests for comment.
Only the Aquila financial company and associated entities held “secured” claims. That is, their debts were supported by collateral pledged by Canoo. The debt, including many other creditors, including automotive supplier Magna (with accrued nearly $3 million), and financial advisor Yorkville (who sold millions of canoe shares and owed $7 million), are lined up for Aquila’s payments.
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