The CEO of Canoo is buying nearly all of the defunct EV startup’s assets out of bankruptcy, according to a court filing.
A new entity controlled by the CEO, Anthony Aquila, has offered to purchase “substantially all” of the assets for $4 million in cash. The sale will also wipe clean a more-than-$11 million debt Canoo owed to a financial firm run by Aquila, which loaned money to the startup during its final months.
The sale proposal comes just six weeks after Canoo filed for a Chapter 7 bankruptcy liquidation in Delaware and wound down its business. The startup, which went public in 2020 as part of a merger with a special purpose acquisition company, never sold more than a handful of its electric vans to government entities like NASA, the United States Postal Service, and the Department of Defense, before it failed.
Canoo has told the court that as of February 24 it had around $145 million in assets and $175 million in liabilities, and around $12 million in cash and equivalents. Other interested parties can submit “higher and better offers” for the company’s assets before a deadline of March 28, according to a filing.
But the bankruptcy trustee wrote in the filing that the “best course of action” would be to proceed with the sale to Aquila. The trustee cited a number of reasons for this, such as a “lack of financing currently available” to support EV manufacturing.
He wrote that the failure of other EV startups (like Fisker and Nikola, though he did not name them specifically) has produced a “glut of EV related assets” that are available “at fire-sale prices.” He also wrote that Canoo’s estate doesn’t have the money to cover “rents, security costs, and insurance necessary to maintain the integrity of the assets.”
As long as it goes through, Aquila’s new entity — called WHS Energy Solutions, Inc. and created in Delaware — will receive Canoo’s manufacturing equipment, completed vehicles, intellectual property, contracts, and other inventory and assets. WHS Energy Solutions is not taking over any of Canoo’s leases, and will not be responsible for any of the claims other creditors have against Canoo’s estate.
Aquila has told the bankruptcy trustee that a “principal motivation” for buying the assets is the CEO’s “desire to honor [Canoo’s] commitment to provide service and support for certain government programs.”
“While the viability of all government spending is currently uncertain, the Buyer has been advised by these agencies that unless they can be assured that the Buyer can provide assurance promptly that it will be able to continue to provide the services and support provided by the Debtors, the programs will be materially delayed and the government will have to begin the time-consuming process of seeking and qualifying other contractors,” the trustee wrote in the filing.
CEOs or founders trying to buy up the assets of their bankrupt startups is not uncommon, even in the world of electric vehicles. In 2023, the former CEO of bankrupt EV startup Lordstown Motors purchased most of its assets and started a new company called LandX Motors. But more often than not, the assets get sold to other companies or auctioned off in pieces.
It’s unclear what Aquila plans to do with Canoo’s assets if he is successful in completing the transaction. The Canoo CEO did not respond to a request for comment.
Only Aquila’s financial firm and related entities held “secured” claims, meaning their debt was backed by collateral pledged by Canoo. The debts owed to its many other creditors — which include automotive supplier Magna (owed nearly $3 million), and financial advisors Yorkville (which sold millions of shares of Canoo stock and are owed $7 million) are behind Aquila’s in line to get paid back.