Lordstown Motors Plans Legal Battle Against Foxconn - What's Going On?

Lordstown Motors Corp RIDE plans to take the legal route against Taiwanese electronics contract manufacturer Foxconn Technology Co Ltd FXCOF.

The electric vehicle manufacturer has made the move after Foxconn failed to close the purchase of approximately 10% of Lordstown's shares for $47.3 million.

Lordstown had earlier warned of potential bankruptcy due to uncertainty of a $170 million investment deal with Foxconn, reported Reuters.

If the investment came through, Foxconn would acquire 20% stake in the EV producer. It now holds an 8% stake.

Also Read: Lordstown Motors Dodges Potential Nasdaq Delisting With Reverse Stock Split Lordstown, in a filing, said it is taking the legal route as Foxconn was unlikely to complete the promised purchase.

"The Company believes that Foxconn’s various breaches of the Investment Agreement and pattern of bad faith have caused material and irreparable harm to the Company," Lordstown said in the filing.

Price Action: RIDE shares are trading higher by 1.05% at $3.23 on the last check Friday.