The sale of assets to the CEO of a bankrupt EV Startup Canoo is fine by a judge overseeing the trial. Judge Brendan Shannon said at a hearing Wednesday that the process was fair and that no one other than Canoo bids except Anthony Aquila, after evaluating many limited objections to the sale.
Once official, Shannon’s decision has paved the way Aquila can purchase the majority of the EV startup’s assets for about $4 million in cash. According to a lawyer representing the CEO, Aquila will serve clients such as NASA and the Department of Defense.
Canoo is the latest failure in the wave of EV startups, a list that includes Fisker, Lordstown Motors and Nikola.
CANOO is not just one of these companies that has tried to buy assets from CEOs. Steve Burns, founder and former CEO of Roadtown Motors, has gone bankrupt much of his company’s assets.
Aquila wasn’t the only one interested in Canoo’s assets.
Canoo’s lawyer Mark Felger said during the hearing that eight other parties other than Aquila had signed the NDAS and evaluated what was being sold. He said he was only a handful of people approaching bidding, including a group that said bankruptcy councillors could raise concerns with the US Foreign Investment Committee because of “foreign ownership” (unspecified).
The most notable of the parties that have almost bid on assets was Harbinger, an electric truck startup that recently opposed sales and claimed Canoo was hiding its assets from potential buyers.
Harbinger’s founding team and many of its early employees split from Canoo in 2021 to create a new startup. Canoo accused the founders of misappropriating occupational secrets in a lawsuit filed late in 2022.
The outcome of that lawsuit was central to the sale of Canoo’s assets. The trustee believes that canoe victory in this case could result in a large chunk of money and a potential injunction against the foreground using one of those trade secrets.
Harbinger’s lawyer John Morris emphasized that despite his two years in court, no one other than Aquila knows how occupational secrets are even misappropriated. The canoe never designated what Harbinger appears to have stolen, even under the seal.
Harbinger’s objection to the sale has addressed this in part, and therefore argues that the trustee or valuation company may not be able to properly evaluate the property.
Morris also raised the issue of certain provisions in the sales agreement, giving Akira the ultimate approval for the potential settlement of the case with the canoe.
Morris argued that the trustee had waived his fiduciary duty on the property by giving the opposing Aquila the final say to the settlement. Shannon ultimately opposed.
Shannon referenced the councillor’s testimony that negotiations with Akira took several weeks and involved many offers and counter-offs as evidence that the sale was properly considered. He said Aquila’s relationship with the company was properly revealed.
“The trustee has carried out a process that brought about an important offer,” he said, “is proceeding in good faith.”
Other objections to the sale came primarily from companies that have outstanding balances with Canoo or still hold equipment. Felger told the court on Wednesday that most, if not all of them, are in the process of being resolved.
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