A U.S. bankruptcy judge has rejected an effort by U.K. financier Charles Garson to overturn the sale of Canoo Inc.’s assets to its own CEO, Anthony Aquila, ruling that Garson lacked legal standing and failed to meet the deadline for submitting a valid bid.
Judge Brendan Linehan Shannon, presiding over the electric vehicle startup’s Chapter 7 bankruptcy proceedings, said during a Tuesday hearing that Garson had not formally submitted an offer to purchase the company’s assets and was not a creditor of Canoo, disqualifying him from challenging the sale.
“I am sympathetic to Mr. Garson’s frustration at what I sense and am satisfied is a genuine interest to provide a superior bid and purchase these assets,” Judge Shannon said. “But it was a complex process run by the Chapter 7 trustee that I don’t think Mr. Garson had a full handle on.”
Garson claimed he was prepared to offer up to $20 million but failed to submit a formal bid by the court’s deadline. His attorney, Jason Angelo, argued that communications with the bankruptcy trustee led him to believe he had until the end of April to finalize his offer. “I think it would make sense here to allow a redo, so to speak,” Angelo told the court, citing his client’s “sincerity and earnestness.”
However, Mark Felger, attorney for the bankruptcy trustee, countered that the bidding process had been transparent and fair. “It was clear how we were proceeding,” Felger said. “He knew there was a sale hearing on the ninth, and he chose not to file anything.” He also noted concerns over delays in the sale, citing high maintenance costs for Canoo’s assets — particularly its battery packs — that risked eroding estate value.
The sale to Aquila had drawn criticism due to potential insider conflicts, but Felger insisted the trustee had negotiated “back and forth a dozen times” to secure fair terms.
Garson’s failed challenge leaves Harbinger Motors, a rival electric truck startup founded by former Canoo employees, as the last objector. Harbinger’s initial objection was dismissed in April, but the company has since filed an appeal.
Following the ruling, Garson issued a statement acknowledging the outcome: “While the outcome wasn’t what I’d hoped for, I respect the court’s decision and want to extend my congratulations to Tony Aquila.”
Source: TechCrunch