EV startup’s lawsuit against Foxconn will proceed
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Legal
A lawsuit and bankruptcy proceeding filed by Nu Ride, formerly known as Lordstown Motors Corp., against Foxconn will continue, according to a Sept. 12 U.S. District Court decision.
The Delaware court affirmed the Bankruptcy Court’s decision to partially deny Foxconn’s adversary motion to dismiss.
Nine of Nu Ride’s claims survived, including fraud, breach of the investment agreement, and tortious interference. The case was filed in June 2023, six months after then-Lordstown announced that its full-size battery-electric pickup truck, the Endurance, had achieved full approval and certification from both the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB).
Foxconn purchased a Lordstown, Ohio, factory from Lordstown Motors in 2022, where the two companies collaborated to build the Endurance. The partnership between the companies began in 2021, according to the lawsuit.
In September 2023, Foxconn filed a motion to dismiss, arguing that all of Nu Ride’s claims are subject to binding arbitration provisions and that Nu Ride failed to state a claim for relief.
According to Nu Ride’s investor relations site, it “emerged” from bankruptcy on March 14, 2024, as a public reporting company. At year-end 2024, the company’s assets consisted primarily of $29.5 million in unrestricted cash, $23.4 million in restricted short-term investments, $1.1 billion in net operating loss carry forwards with no expiration date, and various causes of action.
A Bankruptcy Court ruled in 2024 that Nu Ride pleaded viable claims against Foxconn that weren’t subject to mandatory arbitration. The court also dismissed two of the company’s claims in favor of arbitration.
Nu Ride states in the press release issued Monday that it “continues to believe that Foxconn’s actions have caused substantial harm to the company’s operations and prospects and caused significant damages and intends to vigorously continue pursuing this litigation.”
“However, no assurances can be provided as to the company having sufficient resources to pursue the Foxconn litigation, the outcome, or recoveries, if any,” Nu Ride says in the release.
Andrew L. Sole, chairman of the Nu Ride Board of Directors, added that the board is pleased with the District Court’s affirmation.
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