In a recent hearing concerning Canoo’s bankruptcy proceedings, a judge rejected an effort by a UK financier, Charles Garson, to challenge the sale of the company’s assets to its CEO, Anthony Aquila. Judge Brendan Linehan Shannon ruled that Garson did not have the standing to request the sale be vacated, primarily because he failed to submit a formal bid by the stipulated deadline, despite indicating a willingness to pay up to $20 million.
Garson’s proposal raised concerns regarding the source of funding, prompting the bankruptcy trustee to question its validity. There were worries the bid could run afoul of U.S. foreign investment regulations. The only remaining opposition to the sale comes from Harbinger Motors, a startup formed by ex-Canoo employees, who had previously objected to the transaction. Although their objection was dismissed by Judge Shannon, they have since filed an appeal.
Garson’s lawyer described his client’s position as a “David versus Goliath” situation, arguing that discussions with the bankruptcy trustee led Garson to believe he had until the end of April to make a formal offer. Garson’s initial filings suggested the sale process was unfair, as the assets were being sold directly to Aquila.
However, the lawyer for the bankruptcy trustee, Mark Felger, maintained that the sales process had been conducted fairly, asserting that there was no confusion or deception involved. He stressed that all negotiations were transparent and that Garson had been aware of the sale hearing. Felger also acknowledged concerns about the insider sale to the CEO but emphasised that Aquila stepped up to secure the assets after extensive negotiations.
Ultimately, Judge Shannon ruled swiftly against Garson, stating that since he had neither a financial claim against Canoo nor a timely bid, his motion to vacate the sale lacked validity. Shannon expressed sympathy for Garson’s interest in making a superior offer but concluded that Garson did not grasp the complexities of the bankruptcy process adequately.
In his remarks, the judge clarified that it had been made evident who Aquila was from the outset, and his position as CEO did not preclude him from acquiring the company’s assets.
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