OHIO — Lordstown Motors announced Tuesday morning that it's suing its former partner, Foxconn, as well as filed for bankruptcy protection. 

Lordstown said it's part of a restructuring process in order to maximize the value of its assets: its Endurance all-electric pickup truck and the intellectual property, platform and people who developed it. 

What You Need To Know

  • In the complaint against Foxconn, the focus is on the partnership between the two where Lordstown divested valuable assets to Foxconn, including the Lordstown, Ohio manufacturing facility

  • The company filed for Chapter 11 on Tuesday as well, to resolve its contingent liabilities through a restructuring process

  • For more information on the Chapter 11 filing and court documents, click here

Lordstown filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware after a string of financial woes, and it's searching for someone to buy the company.

According to a news release, Lordstown accused Foxconn of fraud and said it consistently failed to live up to the commercial and financial commitments to Lordstown Motors. 

"Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown's assets for the benefit of our stakeholders. We will vigorously pursue our litigation claims against Foxconn accordingly," Edward Hightower, CEO and president of Lordstown, said in a press release.

Hon Hai Technology group said in a news release it has been holding "a positive attitude" in conducting negotiations with Lordstown and while helping Lordstown navigate its finances. 

"However, during this time, (Lordstown) has continuously attempted to mislead the public and has been reluctant to perform the investment agreement between the two parties in accordance with its terms," according to the news release.

Foxconn said it hoped to continue discussion and reach a solution, but so far the companies have been unable to reach a consensus.

"Regarding (Lordstown's) litigation announcement today and the false comments and malicious attacks made by Lordstown in its external statements against Foxconn, (Foxconn) reserves the right to pursue legal actions and also suspends subsequent good faith negotiations," Foxconn said in a news release.

In the complaint against Foxconn, the focus is on the partnership between the two where Lordstown divested valuable assets to Foxconn, including the Lordstown, Ohio manufacturing facility. 

According to the lawsuit, the upfront purchase for the facility reflected expected benefits of partnering with Foxconn who would support the Endurance pickup truck in several ways and follow through on a joint vehicle development program.

The lawsuit states Foxconn had no intention of adhering to its commitments, particularly with the new vehicle development platform. It states Foxconn, "used its variety of contractual arrangements with the Company as a tool to maliciously and in bad faith destroy Lordstown's business—while leveraging resources gained through the partnership to advance its own business interests." 

In early May, electronics company Foxconn wavered on a $170 million investment in Lordstown. The Ohio company said in a regulatory filing at the time that it had received notice from Foxconn on April 21 that it was in breach of their investment agreement because it had received a delisting warning from Nasdaq two days earlier.

Lordstown said at the time that given the uncertainties, there was substantial doubt it could continue as a going concern.

Lordstown was in danger of being delisted from the Nasdaq because its share price closed below $1 on March 7 and continued to falter after that.

Foxconn told Lordstown at the time that it may unwind their agreement if Lordstown did not resolve its listing issues. Lordstown said in May that it had notified Foxconn that, among other things, it believed the breach allegations were without merit and that the terms of the investment agreement didn’t allow Foxconn to end the deal following the initial closing.

Because of the "irreparable harm," Lordstown is moving to a marketing and sale process for the Endurance vehicle, restructuring under Chapter 11. The company said it anticipates the restructuring to enable an expedited timeline for the lawsuit against Foxconn.

To ensure a smooth transition into Chapter 11, Lordstown Motors filed a series of customary "first day" motions to continue operating the business and uphold its commitments to stakeholders during the process. Lordstown expects to receive approval of these routine "first day" requests in short order and enters Chapter 11 with significant cash on hand and is debt-free.

"We remain confident that an orderly, expedited sale process will maximize value for our stakeholders and enable the talent and technology behind the Endurance to find new and supportive ownership," Hightower said. "While in Chapter 11, Lordstown will continue to support our customers. We are grateful for the Lordstown team for their commitment and dedication to our vision and to our customers, suppliers and business partners for believing in the Endurance and in the EV evolution."

For more information on the Chapter 11 filing and court documents, click here.

The Associated Press contributed to this article.