Lordstown Motors’ Chapter 11 plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Jan. 2 – Lordstown Motors Corp.’s Chapter 11 plan drew an objection from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to documents filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

The plan provides for a discharge of the debtors, but Vara said they are not eligible for this under the bankruptcy code.

Vara noted that the bankruptcy code provides that confirmation of a plan doesn’t discharge a debtor if the plan provides for the liquidation of all of most of the property of the estate and the debtor doesn’t engage in business after consummation of the plan.

Lordstown’s plan provides for the liquidation of all of the debtors’ property, and the debtors will not engage in business after consummation of the plan, the U.S. trustee said.

The plan hearing is scheduled for Jan. 10.

The Lordstown, Ohio-based electric vehicle maker filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on June 27, 2023 under case number 23-10831.

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