Lordstown Motors Recruits Top M&A Lawyer as New General Counsel
Lordstown Motors is an electric vehicle maker that seeks to rival Tesla, Rivian, and Nikola. It recently hired top mergers and acquisitions lawyer Melissa Leonard as its new general counsel. Melissa Leonard joins the company as it faces a federal investigation.
The Rapid Rise of Lordstown Motors
Founded in 2018, the company specializes in producing light duty commercial fleet vehicles. Its signature product is The Endurance electric pick-up truck. The Endurance is designed with 4 in-wheel hub motors and has a range of 250 miles. Its starting price is $52,500.
Lordstown Motors builds electric vehicles at a production and assembly plant in Lordstown, Ohio. The startup purchased its Lordstown, Ohio plant in 2019: a recently shuttered General Motors factory. The intention of this move was to give the company an advantage over competitors building their own plants. General Motors is also an investor in the startup.
The startup became a publicly traded company in October 2020. It merged with a special purpose acquisition company (SPAC) called DiamondPeak Holdings, which enabled it to become a Nasdaq-listed company. A SPAC, also known as a blank-check company, is a publicly traded shell company formed to find a privately held acquisition target. After it finds a target, the SPAC combines with the privately held company and takes it public.
In November 2021, Lordstown Motors announced it had entered an agreement to sell the plant to Taiwanese electronics manufacturer Foxconn for $230 million. The Foxconn partnership will help the electric vehicle startup scale its operations faster. In addition, Foxconn’s logistic capabilities, supply chain network, as well as its hardware and software integration experience will support the electric vehicle company’s growth. Ms. Leonard was the lead outside lawyer who advised the electric vehicle company on the transaction.
In addition to its Ohio headquarters, the startup has research and development facilities in Michigan and California. It plans to launch other electric SUVs outside of The Endurance.
Legal Expertise at the Startup
Ms. Leonard will become the new general counsel of Lordstown Motors in early 2022. Ms. Leonard’s predecessor, Thomas Canepa, will step down to pursue other opportunities.
Ms. Leonard brings a wealth of experience to the table, particularly in business law. She was a partner at Baker & Hostetler LLP, co-leading the firm’s Mergers & Acquisitions group. Baker & Hostetler has been the main outside law firm for electric vehicle startup since 2019 and Ms. Leonard has been the primary outside lawyer working with them.
CEO Daniel Ninivaggi has expressed excitement that such an accomplished lawyer will be heading their legal department. “Not only does Melissa bring over twenty years of deep experience in mergers and acquisitions, financing, and corporate governance, she knows Lordstown Motors well, having served as our primary outside corporate counsel over the past two years,” Mr. Ninivaggi remarked. “I look forward to her continuing contributions as a core member of our management team.”
Daniel Ninivaggi is also a former law firm partner. He was appointed CEO in August 2021. Mr. Ninivaggi began his career as a corporate lawyer then became a partner at international law firm Winston & Strawn LLP. He later served in a variety of private and public company legal and business roles, including CEO of Icahn Enterprises. His experience has also touched upon the automotive, gaming, railcar, rental car, and finance industries. Mr. Ninivaggi is a graduate of Stanford University School of Law, the University of Chicago Graduate School of Business, and Columbia University.
Investigations by Regulators
The electric vehicle startup is facing heightened regulatory scrutiny. The Department of Justice and the Securities and Exchange Commission (SEC) are actively investigating the company’s business operations. The SEC probe alleges the startup misled investors with inflated claims about the number of vehicles it planned to sell. The investment research firm Hindenburg Research unveiled evidence that the company fabricated some electric vehicle preorders. As a result, founder and CEO Steve Burns was forced to step down in June 2021.
Despite the various legal and regulatory challenges ahead for the company, Ms. Leonard appears ready to tackle them head on. “I am thrilled to be joining the Lordstown Motors team at such an exciting time,” Ms. Leonard stated. She continued, “I look forward to continuing to work alongside Dan and the entire Lordstown team as we get closer to bringing The Endurance to our commercial fleet customers, further strengthen our global strategic partnership with Foxconn, and expand the commercial fleet opportunities within the automotive industry with Lordstown Motors designed and engineered electric vehicles.”