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Publications | June 28, 2023
2 minute read

EV Manufacturer Lordstown Motors Files for Chapter 11 Bankruptcy

Lordstown Motors, an Ohio-based electric vehicle manufacturer, filed for chapter 11 bankruptcy in Delaware federal court on June 27, 2023. This filing is unsurprising, as the automotive company has been struggling financially for a long time, with bankruptcy threats surfacing as early as May 2023. So why are we bringing this foreseen bankruptcy case to your attention? Because automotive-related bankruptcies include unique issues that are generally not present in other manufacturing cases, and because it’s important for suppliers, creditors and customers of Lordstown, and any other automotive manufacturer, to understand their rights when bankruptcy hits.

For the reasons explained below, we urge Lordstown suppliers, creditors and customers to contact experienced bankruptcy counsel immediately to maximize their recovery.

It’s important to note that critical opportunities to improve a supplier’s position and deadlines are established very early in a bankruptcy case. Time is of the essence. These opportunities and deadlines include offers of critical vendor status, processes for preferential treatment by filing priority claims if product has been received by the debtor within 20 days prior to the bankruptcy petition and, in some instances, special reclamation claims which must be filed within 20 days of the filing.

There are also unique and somewhat technical issues affecting suppliers that have ongoing long-term agreements, purchase orders and other contracts with the debtor, as these may require the supplier to continue shipping. These long-term contracts, especially for sole-source suppliers, may provide an opportunity to significantly enhance payment of claims arising both before and after the bankruptcy filing.

Warner Norcross + Judd’s Bankruptcy, Restructuring and Insolvency Practice Group and its Automotive Industry Group have significant experience with these specialized bankruptcy matters dating back to the OEM and supplier bankruptcies of General Motors, Chrysler, Delphi, Visteon, Plastech and many others. We can assist creditors and suppliers of Lordstown Motors in maximizing their recovery and avoiding the many bankruptcy pitfalls that are common in this industry.

If you are a creditor, supplier or customer of Lordstown Motors, it is imperative for you to understand your legal rights and the remedies available to protect your interests. If you have questions or concerns related to this or any other bankruptcy issue, please contact Rozanne Giunta, Susan Cook, Dennis Loughlin or a member of Warner’s Bankruptcy, Restructuring and Insolvency Practice Group or Automotive Industry Group.