Written by Cláudio Afonso | LinkedIn | X
Electric vehicle startup Canoo and its SPAC sponsors secured a fresh legal victory on Monday as the Delaware Supreme Court upheld the dismissal of investor claims alleging the company misled shareholders during its blank-check merger.
As initially reported by Bloomberg Law late Monday, the ruling affirms an earlier Delaware Chancery Court decision rejecting claims by a Hennessy Capital LLC investor, who argued shareholders were deceived in the December 2020 SPAC deal that took Canoo public. The high court unanimously ruled that the chancery’s dismissal should stand, Justice Karen L. Valihura said in the court filing.
The investor, Paul White Jr., alleged in 2022 that Hennessy Capital Acquisition Corp. and its principals misled shareholders about material changes to Canoo’s business model post-merger.
In August 2023, the U.S. Securities and Exchange Commission (SEC) charged Canoo, former CEO Ulrich Kranz, and former CFO Paul Balciunas over inaccurate revenue projections and nearly $1 million in undisclosed executive compensation.
The SEC alleged that Canoo’s projections of $120 million in revenue for 2021 and $250 million for 2022 were unreasonable, as the projects underpinning those forecasts were no longer active. The agency also accused Kranz of failing to disclose substantial compensation received from major Canoo investors in late 2019 and 2020.
Canoo shares rose 54% to $0.17 in Monday’s after-market session following Bloomberg’s report. The stock had dropped 16% on Tuesday, closing at $0.11.
The company announced last Friday that James C. Chen, a former Tesla and Rivian executive, has resigned and will depart the Board of Directors less than a year after joining.
Chen’s departure follows the announcement of another round of furloughs last week, which the company confirmed in the same SEC filing. The company led by Tony Aquila stated that “an additional 10 employees” were furloughed, “resulting in a total of 50 non-essential employees over the last 90 days.”
While Canoo has not disclosed which teams were affected or the duration of the furloughs, affected employees told EV that the furlough period is twelve weeks, or roughly three months — the same as in the previous round announced in early November.
Written by Cláudio Afonso | LinkedIn | X
