A U.S. bankruptcy judge has approved the sale of most assets of bankrupt electric vehicle (EV) startup Canoo to its CEO Anthony Aquila, clearing the path for a $4 million cash deal that drew scrutiny from potential competitors and creditors.
Judge Brendan Shannon ruled on Wednesday that the sale process was conducted fairly and in good faith, despite limited objections from parties including electric truck startup Harbinger. The court found that Aquila was the only bidder to formally pursue the assets, even after several potential buyers signed non-disclosure agreements to evaluate the offering.
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âThe trustee has run a process that has resulted in a significant offer,â Shannon said during the hearing, adding that negotiations between the trustee and Aquila had involved multiple offers and counteroffers.
Aquila plans to use the acquired assets to continue servicing clients such as NASA and the U.S. Department of Defense, which had previously purchased a small number of Canoo vehicles. The sale comes as the latest chapter in a wave of collapses among EV startups, including Fisker, Lordstown Motors, and Nikola.
See also:Canoo Files for Bankruptcy, Ceases Operations Immediately
Canoo is not the only bankrupt EV firm to see a CEO or founder try to reclaim company assets. Lordstownâs founder Steve Burns acquired much of that companyâs technology and equipment through a similar process. Trevor Milton, the pardoned founder of Nikola, is reportedly attempting the same.
Harbinger, founded by former Canoo employees, filed a formal objection to the sale, alleging that the company failed to disclose key assets and that the ongoing lawsuit between Canoo and Harbingerâover alleged trade secret theftâwas improperly influencing the asset valuation.
John Morris, a lawyer for Harbinger, argued that the bankruptcy trustee had âabandoned his fiduciary dutyâ by allowing Aquila to retain final approval over any settlement in the lawsuit. The court rejected that claim.
See also: Nikola Founder Milton Seeks to Acquire Company Assets Amid Bankruptcy Sale
The sale agreement includes a clause giving Aquila veto power over any settlement in the trade secrets case, which remains unresolved. Harbinger has denied wrongdoing and contends that Canoo never specified what trade secrets were allegedly misappropriated, even in sealed court documents.
Despite these concerns, Shannon ruled that the trusteeâs actions were transparent and the sale terms fair. Outstanding objections from creditors and equipment holders are currently being resolved, according to Canooâs legal representatives.