EV maker Lordstown plans to sue Foxconn over funding dispute
The company, and its EV peers have been struggling as access to capital tightens from rising interest rates and economic uncertainty.
The cash-strapped EV maker had warned earlier it might be forced to file for bankruptcy, citing uncertainty over a $170 million investment deal with Foxconn through which the Taiwanese company would hold a near-20% stake in the money-losing U.S. firm.Foxconn has since invested $52.7 million and is balking at purchasing additional shares, citing a breach of their agreement, Lordstown said.
On Friday, the U.S. company, named after the town in Ohio where it is based, said in a filing it believed Foxconn was unlikely to complete the promised purchase, citing a letter the contract manufacturer sent Lordstown earlier this month, in which the Taiwanese company did not acknowledge the subsequent common closing.
"The company believes that Foxconn's various breaches of the investment agreement and pattern of bad faith have caused material and irreparable harm to the company," Lordstown added in the filing.Lordstown, whose shares has tumbled more than 80% this year, also said in May
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