Lordstown Motors' newly formed three-member equity committee has hired M3 Partners as its financial advisor, said two sources familiar with the matter. The committee is working with Brown Rudnick as legal advisor, according to court documents.
The US Trustee appointed the official committee of equity security holders on 7 September without a motion by any party. None of the three committee members has yet appeared in the case.
The committee members are:
Source: Notice of appointment of official equity committee
The electric vehicle maker, which filed for Chapter 11 in freefall in June, plans to sell its assets in bankruptcy. An auction is scheduled to take place on 27 September, and a sale hearing on 18 October. The company has not named a stalking horse bidder to back the process.
The debtor is pursuing litigation against former partner Foxconn, accusing the manufacturer of fraud that “destroyed the company’s business and future.” Last month, Lordstown defeated a motion by Foxconn to dismiss the bankruptcy case.
Earlier this month, Lordstown filed a disclosure statement and Chapter 11 plan that would provide some recovery to secured creditors, unsecured creditors and equity holders, while wiping out Foxconn.
Lordstown does not have any funded debt, instead coming into Chapter 11 largely due to the Foxconn dispute.
The debtor also filed an application to engage Winston & Strawn as special litigation counsel to advise it in connection with a trio of stockholder actions accusing the company of breach of fiduciary duty. The firm, which has been retained outside of bankruptcy by the debtor or one of its affiliates since November 2021, proposes to bill the estate USD 1,095 to USD 2,040 per hour for the work of its partners. In recent years, Winston has worked as special counsel to a crossholder group of bondholders in the Chapter 11 case of Talen Energy Supply and lead counsel to ION Geophysical and Fore Machine, according to Debtwire’s Restructuring Database.
A hearing on the Winston retention application is scheduled for 18 October before Judge Mary Walrath of the US Bankruptcy Court for the District of Delaware.