NEW YORK : Bankrupt electric vehicle manufacturer Lordstown Motors has proposed to pay nothing for Taiwan's Foxconn's preferred equity shares, saying it will prioritize other shareholders if an ongoing sales effort generates enough cash to repay other debts.
Even if the sale generates enough money for a shareholder payout, Lordstown proposed to pay nothing to the 300,000 preferred equity shares held by its estranged former business partner Foxconn.Foxconn, formally called Hon Hai Precision Industry and best known for assembling Apple's iPhones, purchased Lordstown's manufacturing facility as part of its push into the electric vehicle market.
Lordstown alleged that Foxconn purchased only $30 million of the $100 million in preferred equity shares contemplated by the disputed investment agreement. Foxconn also purchased $22.7 million of Lordstown's common shares, owning about 8.4 per cent of the company's equity, according to court documents.