Lordstown Motors’ leaders and backers lost their bid to pause investor litigation over the blank-check merger that took the electric truck maker public, Bloomberg reports, when a Delaware judge ruled that the lawsuit involves too many novel legal issues to be paused pending the outcome of a parallel case.
Vice Chancellor Lori W. Will denied a motion to suspend proceedings in Delaware’s Chancery Court while a proposed federal securities fraud class action involving similar allegations plays out in a Youngstown, Ohio, federal court.
The EV maker was hit last year with 11 class action lawsuits, all alleging that company executives and directors misled investors about preorders of Lordstown Motors’ inaugural product, the all-electric Endurance pickup truck.
Members of the leadership team appear to have sold large amounts of Lordstown stock just before reports of various troubles at the company became public in 2021. Five top Lordstown executives — including president Rich Schmidt, now former CFO Julio Rodriguez, and propulsion head Chuan “John” Vo — sold some of their shares worth a total of more than $8 million in early February 2021 when the stock was worth around $24 a share. It last traded today at $2.37.
An SEC investigation is focused on the company’s October 2020 merger with SPAC DiamondPeak Holdings, as well as preorders for its vehicles. Read more.
