The Canoa CEO is buying almost all the assets of the EV Startup in bankruptcy, according to a court presentation.
A new entity controlled by the CEO, Anthony Aquila, has offered to buy “all” of the assets for $ 4 million in cash. The sale will also erase a debt more than $ 11 million that Canoo is due to a financial company led by Aquila, which lent money to the startup during its last months.
The sale proposal occurs only six weeks after Canoo declared a bankruptcy liquidation of Chapter 7 in Delaware and finished its business. The startup, which was made public in 2020 as part of a fusion with a special purpose acquisition company, never sold more than a handful of its electric trucks to government entities such as NASA, the United States postal service and the Department of Defense, before it failed.
Canoa has told the court that has around $ 145 million in assets and $ 175 million in liabilities, and around $ 12 million in cash and equivalents, as of February 24. Other interested parties may present “higher and better offers” for the company’s assets before a deadline of March 28, according to a presentation.
But the bankruptcy administrator wrote in the presentation that the “best course of action” would be to proceed with the sale to Aquila. The administrator cited a series of reasons for this, as a “lack of financing currently available” to support the manufacture of EV. He wrote that the failure of other new EV companies (such as Fisker and Nikola, although he did not appoint them specifically) has produced an “excess of assets related to EVs” that are available “at fire sales prices.” He also wrote that the heritage of Canoo does not have the money to cover “rentals, safety costs and insurance necessary to maintain the integrity of the assets.”
While passing, Aquila’s new entity, called Whs Energy Solutions, Inc. and created in Delaware, will receive the Canoo manufacturing equipment, complete vehicles, intellectual property, contracts and other inventory and assets. Whs Energy Solutions does not take care of any of Canoo’s leases, and will not be responsible for any of the claims that other creditors have against Canoo’s heritage.
Aquila has told the bankruptcy administrator that a “main motivation” to buy assets is the “desire for honor of the CEO. [Canoo’s] Commitment to provide service and support for certain government programs. ”
“While the viability of all government expenses is currently uncertain, these agencies have advised the buyer who, unless it can be ensured that the buyer can quickly guarantee that he will continue to provide the services and support provided by [Canoo]The programs will be delayed materially and the Government will have to begin the process that requires a lot of time to search and qualify other contractors, ”wrote the administrator in the presentation.
The CEO or founders who try to buy the assets of their new companies in bankruptcy are not uncommon, even in the world of electric vehicles. In 2023, the former CEO of the Banking Startup Ev Lordstown Motors bought most of its assets and began a new company called Landx Motors. But most of the time, assets are sold to other companies or auctioned in pieces.
It is not clear what Aquila plans with the canoe assets if it succeeds in completing the transaction. The CEO of Canoo did not respond to a request for comments. Only the financial firm of Aquila and the related entities had “guaranteed” claims, which means that its debt was backed by guarantees promised by Canoo. Debts owed their many other creditors, which include the Magna automotive supplier (which owes almost $ 3 million), and Yorkville financial advisors (who sold millions of Canoa shares and owe $ 7 million) are behind Aquila’s online to receive returned.