Electric freight startup Nikola hopes to sell the rest of its entire business by April.
Attorneys claim Nikola already has at least three interested buyers (they don’t have a name) and the company hopes to submit a deadline in late March and hopes to solicit other bids.
If Nikola can’t find a buyer willing to do the entire business, the company will pivot to sell its assets into parts in an effort to meet more than $1 billion in liabilities. (Nicholas claimed assets between $500 million and $1 billion.)
The hearing took place a day after Nikola filed for Chapter 11 bankruptcy protection and announced that it would no longer be an independent business, leaving a troubled company in its founder Trevor Milton ( Trevor Milton suffered dramatic troubles after being convicted. Several counts of securities fraud.
Some early bankruptcy filings and attorney statements show Nicholas has been trying to sell himself for months.
In a sworn in statement, CEO Stephen Girsky said Nikola worked with Goldman Sachs and recruited 22 potential acquirers in the truck manufacturing and transportation logistics space. Two “international cars”
Manufacturers express interest in transactions, According to Girsky. One dropped out of school. Nicholas also exchanged “various terms” with another until the party also walked away by the end of 2024.
Following the failure, Nikola worked with law firm Houlihan Lokey to ask 24 financial investors to “measure the potential benefits of independent investment and investments made with potential strategic partners.” However, the feedback is that according to Girsky, Nikola’s new life business will be transformed into a new life.
In December 2024, Nikola discussed a discussion with another “International Automobile Manufacturing Company” about a potential acquisition involving “substantive due diligence” described by Girsky over a four-week period. But the potential buyer “eventually walked away,” Girsky noted, a “disappointing conclusion.”
Girsky is now in bankruptcy, Nikola is in Coolidge, Arizona.
Chazz Coleman, the attorney representing Nikola’s bankruptcy case, said he hopes the case and sales process are “smooth and smooth”.
Another attorney representing Nikola, Joshua Morse, said Thursday that Nikola will continue to solicit interest until around March 27, the first of the bid submission deadline. A proposed date. Depending on the development of the process, an auction may be held around March 31. Any hearings on potential sales may take place in the second week of April, with the deal taking place soon.
Morse also said at the hearing that the entry rights of potential buyers have only escalated since the company filed for bankruptcy protection.
Bankruptcy Judge Thomas Horan replied: “This does tend to crystallize the market.”
At the hearing, there was little disagreement, mainly in the speed of bankruptcy cases revolved around speed. Nikola hopes it will grow rapidly because it only has about $47 million in cash. Timothy Fox, a trial attorney in the U.S. Trustee’s Office, who oversees the bankruptcy proceedings, said he wanted to make sure he had enough time to meet Nikola’s creditors.
No decision was made at the hearing, but Nikola provided support for a strange party to a swift process: a group of shareholders who sued the company four years ago.
The plaintiff in the case obtained class action status last month, and Nikola agreed to settle the lawsuit shortly before filing for bankruptcy. The plaintiffs have the fourth largest creditor in Nicholas’ bankruptcy, which comes down to this settlement, totaling about $13 million.
Attorney Joe Barsalona, who represents the plaintiffs of the class action lawsuit, said Thursday that given Nikola’s cash balance has decreased, “for our clients, this situation must develop rapidly.”
“We think it’s a melting ice,” Barcelona said.
