According to a recent court filing, the CEO of Canoo, Anthony Aquila, is set to acquire nearly all of the defunct electric vehicle startup’s assets as the company navigates bankruptcy proceedings.

Aquila, through a newly established entity, has put forth an offer to purchase “substantially all” of Canoo’s assets for a sum of $4 million in cash. This proposed sale also includes the forgiveness of a debt exceeding $11 million that Canoo owed to a financial firm under Aquila’s control, which had provided loans to the startup in its final months.

This development comes just six weeks after Canoo initiated Chapter 7 bankruptcy liquidation in Delaware and began winding down its operations. Despite going public in 2020 through a merger with a special purpose acquisition company, Canoo’s performance was underwhelming, with only a handful of its electric vans being sold to government entities such as NASA, the United States Postal Service, and the Department of Defense before its eventual failure.

As of February 24, Canoo reported assets totaling around $145 million and liabilities of approximately $175 million, with about $12 million in cash and equivalents. The court filing also indicates that other interested parties have the opportunity to submit higher offers for the company’s assets until the deadline of March 28.

However, the bankruptcy trustee has expressed that proceeding with the sale to Aquila is the “best course of action.” This recommendation is based on several factors, including the current lack of financing available to support electric vehicle manufacturing. The trustee also noted that the failure of other electric vehicle startups has resulted in a surplus of related assets available at significantly discounted prices. Furthermore, the estate of Canoo lacks the necessary funds to cover essential costs such as rent, security, and insurance to maintain the integrity of its assets.

Should the sale be finalized, Aquila’s new entity, WHS Energy Solutions, Inc., established in Delaware, will acquire Canoo’s manufacturing equipment, completed vehicles, intellectual property, contracts, and other assets. Notably, WHS Energy Solutions will not assume any of Canoo’s leases and will not be liable for claims from other creditors against Canoo’s estate.

Aquila has stated that his primary motivation for purchasing the assets is to honor Canoo’s commitments to providing service and support for certain government programs. The bankruptcy trustee highlighted the importance of this, citing the potential for material delays in these programs if assurances of continued support are not provided promptly.

It is not uncommon for CEOs or founders of bankrupt startups to attempt to acquire the company’s assets, a trend also seen in the electric vehicle sector. For instance, in 2023, the former CEO of Lordstown Motors purchased a significant portion of its assets and established a new company called LandX Motors. However, more often, these assets are sold to other companies or auctioned off in parts.

The future plans for Canoo’s assets under Aquila’s ownership remain uncertain. A request for comment from the Canoo CEO was not responded to.

Aquila’s financial firm and related entities hold “secured” claims, meaning their debt is backed by collateral pledged by Canoo. This places them at the front of the line to be repaid, ahead of other creditors such as automotive supplier Magna, owed nearly $3 million, and financial advisors Yorkville, owed $7 million.