Canoo’s CEO Secures Assets of Bankrupt EV Startup: A Strategic Move in the Electric Vehicle Market

The CEO of Canoo, an electric vehicle (EV) startup, is set to acquire nearly all of the company’s assets following its bankruptcy filing. This significant move comes as Canoo navigates its Chapter 7 bankruptcy liquidation process, with a bid of $4 million in cash from a new entity controlled by CEO Anthony Aquila.

Canoo’s Bankruptcy and Asset Sale Overview

In a recent court filing, it was revealed that Aquila’s new company intends to purchase “substantially all” of Canoo’s assets. This acquisition will also eliminate over $11 million in debt that Canoo owes to Aquila’s financial firm, which supported the startup during its challenging final months.

Details of the Asset Purchase

The asset sale proposal comes just six weeks after Canoo filed for Chapter 7 bankruptcy in Delaware. The startup, which went public in 2020 through a merger with a special purpose acquisition company, struggled to sell more than a handful of electric vans to notable clients, including:

• NASA
• The United States Postal Service
• The Department of Defense

As of February 24, Canoo reported approximately $145 million in assets and $175 million in liabilities, alongside about $12 million in cash and equivalents. The court filing also indicated that other interested parties may submit “higher and better offers” for the company’s assets before a deadline of March 28.

The Bankruptcy Trustee’s Recommendation

The bankruptcy trustee emphasized that pursuing the sale to Aquila is the “best course of action.” Key reasons for this recommendation include:

• A lack of available financing for EV manufacturing.
• The oversupply of EV-related assets due to the failure of other startups.
• The inability of Canoo’s estate to cover essential costs, such as rent and insurance.

If successful, Aquila’s new entity, WHS Energy Solutions, Inc., will acquire Canoo’s manufacturing equipment, finished vehicles, intellectual property, contracts, and other inventory. Notably, WHS Energy Solutions will not assume any of Canoo’s leases or liabilities associated with other creditors.

Aquila’s Motivation for the Acquisition

Aquila expressed a strong commitment to honoring Canoo’s obligations to government programs. He indicated that without assurance of continued service, these programs could face significant delays, prompting the government to seek alternative contractors.

Industry Context: CEO Asset Purchases in the EV Sector

It is not uncommon for CEOs or founders to repurchase the assets of their bankrupt companies, even within the competitive electric vehicle sector. For instance, in 2023, the former CEO of Lordstown Motors acquired most of the company’s assets, launching a new venture called LandX Motors. However, it is more typical for assets to be sold to other firms or auctioned off.

Outstanding Debts and Creditors

Should the acquisition proceed, Aquila’s financial firm and related entities hold “secured” claims, meaning their debt is backed by collateral. Other creditors, such as:

• Magna, owed nearly $3 million
• Yorkville, owed $7 million

will be subordinate in the repayment hierarchy.

For more information about the EV market and similar cases, visit Energy.gov for comprehensive resources and updates.