Canoo Accused Of Hiding Assets During Bankruptcy Sale
Harbinger accuses Canoo’s bankruptcy trustee of skipping a proper appraisal before selling assets to the former CEO
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by Brad Anderson
Canoo filed for Chapter 7 bankruptcy after burning through hundreds of millions in losses.
Harbinger alleges the asset sale unfairly benefited Canoo’s CEO without proper valuation.
The sale may include trade secrets tied to an ongoing lawsuit between the two firms.
It’s not unusual for a flashy EV startup to crash and burn, but Canoo’s spectacular flameout has been anything but clean. After filing for Chapter 7 bankruptcy in January and halting operations entirely, the company is now tangled in a messy dispute that involves hidden assets, questionable sales tactics, and accusations that its CEO may have gotten a little too good of a deal.
Read: Canoo Goes Bust With Less Than $50,000 Left And Millions In Debt
Last Friday, electric trucking startup Harbinger filed a formal objection to the sale of Canoo’s assets to its boss, claiming the sale process “unfairly favored Mr. Aquila.” According to the objection, Canoo failed to disclose certain assets acquired from another failed EV startup—Arrival—and the bankruptcy trustee approved Aquila’s purchase without securing an independent appraisal or even marketing the assets to outside buyers.
Allegations of Hidden Assets and Insider Deals
The situation gets murkier. Harbinger also alleges that Canoo listed some assets that it didn’t actually own for sale. While Harbinger did not specify what these assets were, it says that the access granted to the virtual data room for potential bidders when it considered buying the assets allowed them to make this determination, as first reported by TechCrunch.
The sale of Canoo to its CEO also includes a very important clause. Canoo sued Harbinger in 2022, claiming many of its former employees had stolen trade secrets that were used to create Harbinger. This lawsuit is still ongoing, and through the purchase, Aquila will personally benefit from any settlement that Harbinger may have to pay.
In the complaint, Harbinger notes that the former boss is buying unidentified ‘trade secrets’ from Canoo, “but Mr. Aquila alone supposedly knows what those trade secrets are.” It adds that “a process where only one bidder – an insider – has the ability to identify the assets offered for sale and their value is not a fair process.”
Even before the bankruptcy, Canoo’s financials read like a startup horror story. Since its founding in 2017, the company generated almost no revenue and racked up hundreds of millions in losses. In 2022 alone, Canoo reported a staggering $488 million loss, followed by $303 million in 2023. The first half of 2024 added another $118 million to the bonfire. For comparison, Canoo reported zero revenue in 2022 and just under $900,000 in 2023—a rounding error in the EV world.
