Charles Garson is a U.K.-based early stage investor. Even with no visible connections to electric vehicle startup Canoo, he’s sued the city to challenge the recent proposed sale of Canoo’s assets. Garson has offered $20 million for Canoo’s assets, significantly surpassing the $4 million bid made by Canoo’s CEO, Anthony Aquila. This unusual legal challenge questions the process that led to the asset sale and Garson’s motivations.
Garson’s lawyer filed a motion to vacate the asset sale, claiming that Garson presented a “far superior offer” compared to Aquila’s bid. In further support of this motion, Garson submitted a declaration with 23 attached exhibits. He alleges that in an email from the bankruptcy trustee, his bid would be favored. This makes us wonder how transparent the sale process will be.
The chronology of events points to a rushed sale process that apparently did not consider Garson’s unsolicited offer. However, the bankruptcy trustee had held the Sale Hearing and finalized the sale of Canoo’s assets to Aquila on April 11. Just two days before, Garson had been promised that his strong bid would be seriously considered. This fast turnaround has raised questions as to whether there was a full consideration of all possible offers and the necessary due diligence performed.
It’s not clear why Garson made this offer, or even why his interest in the struggling EV startup was spurred. His motion, conspicuously, doesn’t even attempt to explain why he wants to obtain the company’s assets. Prior to the sale, as many as eight entities executed NDAs. They did some robust due diligence on Canoo’s assets which demonstrates just how aggressively competitive the buyer field was.
Garson feels the urgency pressing down on him. If so, he still needs to work out the specifics of his bid by the end of April. His attorney did not immediately respond to inquiries for comment on the alleged incident or additional information on Garson’s plans.
This legal showdown is playing out right before our eyes. It undercuts any notion of fairness in the bankruptcy process by raising doubts about whether all of the bidders have had a true opportunity to participate in a competitive bidding process.
