Lion Electric has officially filed for bankruptcy protection at the Superior Court of Quebec and plans to do the same in the U.S. under Chapter 15 of the bankruptcy code. The company had a deadline of December 16 to secure a business partner in order to continue receiving public funds from the Coalition Avenir Quebec government. It failed to do so.
As such, trading in Lion's common shares has also come to a halt on the Toronto (TSX) and New York (NYSE) stock exchanges. The TSX has also placed Lion under delisting review while both exchanges, who are continuing to trade Lion's listed securities for the time being.
The company refused to comment further when contacted by Clean Trucking.
As part of its bankruptcy application, Lion is trying to receive approval for a formal sale and investment solicitation process which would allow potential financial saviors to submit proposals for a possible rescue. The application also seeks a stay of proceedings against Lion and its subsidiaries, specifically a stay of creditor claims and other debt obligations.
This does not mean Lion cannot be saved; it's also seeking approval for the appointment of a debut restructuring monitor to oversee bankruptcy proceedings for the court. Bankruptcy protection will enable Lion to continue operating its day-to-day operations under oversight.
Lion manufacturers zero-emission, battery-electric Class 6 and 8 semis and school buses. Earlier this month, it temporarily laid off more than half of its remaining workforce, quietly fired its embattled president, and halted production at its 900,000 square-foot Joliet, Il. school bus factory.
[Related: Lion Electric suspends Illinois plant production, lays off hundreds]
The factory, which opened in July 2023 and located about 50 miles from Chicago opened in July 2023, is the largest U.S.-based facility solely dedicated to all-electric medium- and heavy-duty vehicle manufacturing and is capable of producing around 20,000 vehicles annually. Il. Gov. J.B. Pritzker, a strong advocate of zero-emission vehicles, was present for the factory's opening ceremony and has expressed disappointment in Lion's lack of progress.
[Related: Illinois Gov 'disappointed' in struggling Lion Electric, blames Trump]
The Quebec government, to date, has invested about $177 million CAD into Lion while Ottawa provided another $30 million CAD. Pritzker confirmed that Lion has not received any state funds and this will remain the situation for now.
In 2023 Lion claims it sold 771 school buses and 81 trucks. In the second quarter of this year, Lion delivered 101 vehicles, a decrease of 98 vehicles from the same period last year.
