Lordstown Motors’ efforts to sell itself during its bankruptcy have been delayed as a judge ruled that the electric-vehicle maker must first face a $900 million lawsuit alleging it stole trade secrets, WSJ Pro Bankruptcy reported. Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., is allowing the lawsuit to move forward in California. The plaintiff, Karma Automotive, which filed the lawsuit before the EV maker filed for bankruptcy in June, had argued that Lordstown might try to sell the intellectual property allegedly stolen from them. “It makes good sense to let the Karma case proceed in California before I decide the title issues that might be implicated by a sale process,” Judge Walrath said. “I agree with Karma that the debtor can’t sell something that the debtor cannot establish is the debtor’s property,” Judge Walrath said. “The appropriate thing is for the California court that has devoted three years to conducting discovery and addressing pretrial motions and is fully familiar with these facts should decide those issues.” “We should have a verdict sometime in September,” which isn’t far off from any Lordstown sale process, she said. Lordstown yesterday asked the judge to approve its bid procedures as well as to deny a request by Karma to allow it to continue with its 2020 lawsuit, saying that time is of the essence given the company’s cash burn and financial state.
