Architects of the blank-check merger that took electric vehicle maker Lordstown Motors public will pay $15.5 million to end shareholder litigation challenging the deal, Bloomberg reports.
The settlement, filed Monday, would resolve a proposed class action consolidated in Delaware’s Chancery Court, where parallel cases were brought by investors in Lordstown and DiamondPeak Holdings, the SPAC it combined with in 2020.
The settlement came about a week after the company, which filed for Chapter 11 bankruptcy protection in June, agreed to settle a Securities and Exchange Commission probe for $25.5 million.
The EV maker in 2021 was hit with 11 class action lawsuits.
The founder and former chief executive of Lordstown Motors, Steve Burns, agreed last fall to spend $10 million to purchase the assets of the bankrupt truck manufacturer.
Burns originally founded Lordstown in 2018 and led its IPO with a SPAC in 2020. However, he was forced to leave the automaker in 2021 after it was found that he had grossly overestimated order numbers for the Endurance pickup truck. Read more.
