Canoo’s Assets Sold to CEO Anthony Aquila Amid Bankruptcy Proceedings
A U.S. judge has sanctioned the sale of the assets of Canoo, a bankrupt electric vehicle startup, to its CEO, Anthony Aquila. The ruling by Judge Brendan Shannon highlights the singular nature of Aquila’s bid in a competitive financial landscape where numerous parties previously expressed interest in the company’s assets.
The Transaction Details
Judge Shannon’s approval, delivered during a hearing on Wednesday, allows Aquila to acquire the majority of Canoo’s assets for approximately $4 million in cash. The CEO intends to focus on providing services to high-profile clients, including NASA and the Department of Defense, entities that had previously purchased vehicles from Canoo prior to its financial collapse.
Background on Canoo’s Financial Struggles
Canoo joins a growing list of electric vehicle startups that have faced bankruptcy, alongside companies like Fisker, Lordstown Motors, and Nikola. This trend raises concerns about the viability of EV startups in a competitive and rapidly evolving market.
Interest from Other Bidders
Although only Aquila ultimately submitted a bid, Mark Felger, a lawyer representing Canoo, indicated that up to eight potential bidders had expressed interest by signing non-disclosure agreements. However, only a few of them advanced toward formal bids, with one group’s involvement raising potential scrutiny from the Committee on Foreign Investment in the United States due to its “foreign ownership,” which was not specified.
Objections and Legal Disputes
One notable contender, Harbinger, an electric truck startup, formally objected to the sale, alleging that Canoo was concealing assets from potential buyers. In court, Aquila’s legal team dismissed Harbinger’s claims as baseless, arguing that the objection lacked factual support.
Harbinger’s founding members had previously transitioned from Canoo to initiate their venture and are currently embroiled in an ongoing lawsuit with Canoo, which alleges the misappropriation of trade secrets. This ongoing legal conflict has become a focal point in the asset sale process, as both parties anticipate that a favorable ruling could yield significant financial returns for Canoo.
Judicial Rulings and Final Approvals
During the proceedings, Harbinger’s lawyer, John Morris, raised concerns regarding the lack of clarity surrounding the alleged trade secrets and insisted that such ambiguity could hinder accurate valuation of Canoo’s assets. Additionally, Morris questioned a specific clause in the sale agreement that permits Aquila to have the final say on any settlement emerging from the lawsuit against Harbinger.
Despite these objections, Judge Shannon affirmed the validity of the sales process, citing extensive negotiations between the trustee and Aquila, which he believed reflected good faith and a careful review of options. “The trustee has run a process that has resulted in a significant offer,” Shannon stated, underscoring the thoroughness of the evaluation.
Concluding Remarks
The ruling marks a definitive step forward in the resolution of Canoo’s bankruptcy, potentially setting precedents for other startups navigating similar financial challenges in the increasingly competitive electric vehicle industry. As Canoo turns a new page under Aquila’s leadership, the future of its operations and client services will be closely monitored by industry stakeholders.
This article has been updated to reflect the judge’s final ruling and further responses from WHS Energy Solutions, the entity under Aquila’s control.
