After an internal review of previously announced production plans and potential hurdles to secure new funding, executives with Electric Last Mile Solutions say filing for Chapter 7 bankruptcy is its best option.
The company, which has a major presence in Mishawaka, had been reviewing its products and commercialization plans as well as focusing its workforce on production. Its review also included the feasibility of meeting previously announced production targets.
The bankruptcy filing follows a leadership restructuring in February. Shauna McIntyre, an auto industry veteran, was appointed interim CEO and president.
McIntyre said bankruptcy appeared to be the best option after company leadership determined there were too many hurdles facing the business moving forward.
“I'm very disappointed by this outcome because our ELMS team demonstrated incredible determination to get our electric vans ready to meet the critical need for clean, connected vehicles that reduce carbon emissions from ground transportation,” McIntyre said. “Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us.”
She said the electric vehicle technology used by ELMS remains viable.
“This is a viable and essential technology, and I am confident that many of our talented employees will play a future role in this energy transition effort,” McIntyre said.
McIntyre replaced James Taylor, CEO and president. Jason Luo, the company’s board chair at that time, also resigned. Their resignations came after an independent committee investigation uncovered potential securities law violations.
The board determined through its investigation, it had to withdraw financial guidance and declare the company's past financial statements unreliable. The results of the investigation, along with a pending SEC investigation, made it extremely challenging to secure a new auditor and attract additional funding, the company said.
The company said it continued to seek new funding, while working with advisors to assess and improve its liquidity position. But the board determined after consulting with outside advisors, that it was in the best interest of the company, its shareholders, creditors, and other interested parties to file for bankruptcy.
Brian Krzanich, company board chair and former CEO of Intel, said for the past few months, the ELMS board worked to address financial, governance and operational issues.
“(Enormous) progress was made, including towards vehicle certification,” he said. “Therefore, it's extremely frustrating that we must take this route, but it was the only responsible next step for our shareholders, partners, creditors, and employees.”
Electric Last Mile Solutions is headquartered in Troy, Michigan. It has a manufacturing site in Mishawaka and additional locations in San Francisco and Shanghai, China.
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