Lordstown successor emerges with Foxconn suit plan, tax breaks in hand
Nearly nine months after filing Chapter 11 papers, Lordstown Motors Corp. has re-emerged as Nu Ride Inc. with cash in the bank and a primary purpose of settling its litigation against contract manufacturing giant Foxconn, which in 2022 bought Lordstown’s factory and pledged more financial support before backing out.
Lordstown had taken over the former General Motors Corp. plant in its namesake Ohio town to build the Endurance pick-up truck—for which it claimed more than 100,000 pre-orders in early 2021. However, procurement and manufacturing problems led to delays and a massive cash crunch that even the $230 million factory sale to Foxconn's parent company, Hon Hai Technology Group, could only temporarily relieve. Foxconn later promised a $170 million direct investment in Lordstown, but the company’s leaders retreated when Lordstown's shares faced delisting in early 2023.
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That essentially doomed Lordstown’s prospects. In May 2023, its executives sued Foxconn, claiming the latter had struck the companies’ deal in bad faith to force a Lordstown bankruptcy that would allow Foxconn to acquire its assets cheaply. Last September, three months after Lordstown had filed for protection from its creditors, former CEO Steve Burns acquired the bulk of its assets for his new venture, LandX.
Present-day Nu Ride has roughly $78 million in cash on hand, a new board of directors, and its most valuable assets: nearly $1 billion in federal net operating losses plus another $880 million in state net operating losses. Those losses can be carried forward and used to offset net income in future years, either from Nu Ride itself or—with some careful planning—a profitable company with which it merges for what tax regulators consider a legitimate business purpose.
Restructuring veteran William Gallagher is in line to step up as president and CEO of Nu Ride. Since 2009, Gallagher has helped restructure the former GMAC Commercial Mortgage and led the successor company to Washington Mutual when it emerged from its implosion with roughly $6 billion in NOL carryforwards. The latter entity merged in mid-2018 with Nationstar Mortgage Holdings; the combined company now goes by Mr. Cooper Group Inc. and is still whittling down the NOLs.
On their website, Nu Ride’s leaders say one of their goals is to “identify, evaluate, and pursue one or more potential business combinations or acquisitions.” How long that might take is anybody’s guess. Until then, you can find the company’s shares on the OTC Pink Market under the ticker NRDE.
