Lordstown Motors Corp. may be forced to cease operations and file for bankruptcy if it can’t come to terms with partner Foxconn or find alternate financing.
The EV startup’s deal with Foxconn Technology Group could unravel after the large Taiwanese company threatened to withhold funding, something that could force Lordstown into insolvency, the company warned in a securities filing on Monday.
“If we are unable to resolve our dispute with Foxconn in a timely manner on terms that allow us to continue operating as planned, identify other sources of funding, identify a strategic partner and resolve our significant contingent liabilities, we may need to curtail or cease operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code,” Lordstown said in the filing.
Last year, Foxconn had said it planned to invest as much as $170 million in the startup.