Electric vehicle (EV) startup Canoo has filed for Chapter 7 bankruptcy, indicating the company will cease operations immediately and liquidate its assets.
The filing was made with the US Bankruptcy Court for Delaware by the company to liquidate its assets.
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Despite delivering products to clients lsuch as NASA, the US Department of Defense, the US Postal Service, and the State of Oklahoma, and securing agreements with Walmart among others, Canoo has faced financial challenges.
The company said it was unable to obtain support from the US Department of Energy’s Loan Program Office, which has contributed to its financial difficulties.
Recent attempts to secure foreign capital were unsuccessful, leading to the board’s decision to file for insolvency.
The bankruptcy will result in the appointment of a federal Bankruptcy Trustee to oversee the liquidation of Canoo’s assets.
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By GlobalDataCanoo’s decision to cease operations is expected to affect all stakeholders.
A court-appointed trustee will now manage the asset liquidation, with Canoo’s team collaborating closely to assist in the process.
Canoo’s bankruptcy filing, including those of its subsidiaries, states that it owes hundreds of creditors and has over $164m in liabilities, with assets totaling about $126m, reported TechCrunch.
The bankruptcy filing follows Canoo’s worker furloughs and factory shutdown in Oklahoma last month.
In 2020, Canoo merged with Hennessy Capital Acquisition and subsequently went public, raising approximately $600m.
In 2023, Canoo was fined $1.5m by the US Securities and Exchange Commission (SEC) for what was described as “reporting failures” related to overly optimistic revenue projections.
