Canoo CEO can buy bankrupt EV startup’s assets, judge rules

Summary

The sale of bankrupt EV startup Canoo’s assets to its CEO has been approved by the judge overseeing the case. After evaluating a number of limited objections to the sale, Judge Brendan Shannon said in a hearing Wednesday he believes the process was fair and that no one else but Canoo CEO Anthony Aquila made a bid. Shannon’s decision paves the way for Aquila to buy most of the assets of the EV startup for around $4 million in cash. Aquila plans to offer services to customers such as NASA and the Department of Defense, which purchased a few Canoo vehicles before the company went under, according to lawyers representing the CEO. Canoo is the latest failure in a wave of EV startups to file for bankruptcy, a list that includes Fisker, Lordstown Motors, and Nikola. Canoo is also not the only one of these companies to have had a CEO try to buy up the assets. Lordstown Motors’ founder and former CEO, Steve Burns, bought most of the assets of his company in bankruptcy, and now newly pardoned Nikola founder and former CEO Trevor Milton is trying to do the same with his startup. Aquila was not the only one interested in Canoo’s assets. Mark Felger, a lawyer for Canoo, said during the hearing that as many as eight parties other than Aquila signed NDAs and evaluated what was for sale. Only a handful of those came close to making a bid, he said, including one group that the bankruptcy trustee said could raise concerns with the Committee on Foreign Investment in the United States because of its (unspecified) “foreign ownership.” Most notable of the parties that nearly bid on the assets was Harbinger, an electric truck startup that recently objected to the sale and claimed Canoo was hiding assets from potential buyers. Lawyers for Aquila said in a reply that Harbinger’s objection was “without merit and devoid of any factual support.” Harbinger’s founding team and many of its earliest employees split off from Canoo to create the new startup in 2021. Canoo accused those founders of m...