💥Charging into Bankruptcy💥
Nikola Corp., Mullēn Automotive Inc. + Hyzon Motors Inc. struggle. Plus: a Ligado Networks update.
⚡Update: Nikola Corp. ($NKLA)⚡
Electric vehicle manufacturers have been dropping like flies lately — filling more bankruptcy dockets than garages.
We previously discussed the shocking (ok, not so much) chapter 7 filing filed by Canoo Inc. (“Canoo”) here:
Of course, Canoo isn’t a pioneer. It was preceded in bankruptcy court by other EV companies like Lordstown Motors, Proterra Inc., and our personal fave, Fisker Inc. This not-so-exclusive club seems poised to get bigger.
Remember Nikola Corp ($NKLA)? You should. We’ve been covering this turd since July ‘23:
We then revisited it in May ‘24:
Unfortunately for this POS, things never got going from there. Most recently, the company booked truck sales of $24.8mm for 3Q’24, bringing YTD truck sales for FY’24 to $61mm. Meanwhile truck sales cost of revenue came in at $82.2mm for 3Q’24 and $222.9mm YTD for FY’24. The company booked ~$200mm+ in GROSS losses in FY’23 and is on track to repeat in FY’24. A little further down the cash flow statement and you’ll find $400mm of incinerated cash through operating activities for the first nine months of FY’24.
Liquidity is getting dire. There’s $198mm of cash on the balance sheet as of 3Q’24, which, according to CFO Tom Okray, is enough to carry the company to 1Q’25 — or, uh, not that far away from now:
“We estimate that our existing cash is sufficient to fund our forecasted operating costs and meet our obligations into but not beyond Q1 2025. We continue to seek to maintain sufficient capital to support our business.”
NKLA has become entirely dependent on equity raises to plug its liquidity problems. In just the first nine months of FY’24, the company issued 5.3mm shares for ~$73mm of cash. As of October 28, 2024, there were 60.9mm shares outstanding.
The stock has, subsequently, been absolutely hammered from the equity dilution:
But we aren’t stopping anytime soon! In December ‘24, the company signed an Equity Distribution Agreement with BTIG, LLC as sales agent. At some point (in the very near future) there isn’t going to be any more juice left to squeeze.
Which brings us to…

Meanwhile, the salty ex-CEO and founder of the company, Trevor Milton, has been having a jolly ol’ time snickering on the sideline:

Lol, yes, this is the same guy that was complicit the main culprit in Nikola’s fraudulent past. He’s actually got a website that, in bold text, declares this:
“Trevor Milton is a name synonymous with innovation, determination, and a relentless pursuit of sustainable technology.”
He’s also been taking his case to the ‘gram. Lol, this guy’s very punchable face is under the Oxford dictionary definition for “vainglorious.”
Cool dog though.
⏩One to Watch: Mullēn Automotive Inc. ($MULN)⏩
We’re really beating a dead horse here but when life gives you dysfunctional ĒV companies …
Mullēn Automotive Inc. ($MULN) is a Southern California-based ĒV company focused on the commercial market. Yes, that means it manufactures “all electric” vehicles that look like this:

And this:

Not the sexiest ĒVs out there. They’re still better than Canoo Inc.’s pill box on wheels though:
Ok, fine, we’re all stick rocking gas guzzlers over here at PETITION so who are we to judge? And aesthetics depend upon the eye of the beholder … or something … right? Anyway, who cares how these puppies look as long as customers are buying the vehicles right?
Fortunately for the company, customers have started ordering!
MULN started generating revenues in FY’23 and has booked $366k and $1.1mm in revenues for FY’23 and FY’24, respectively!
Unfortunately, for those same fiscal years, the company booked $377.8mm (FY’23) and $391.8mm (FY’24) in operating losses. Similarly, the company has burned through $179mm (FY’23) and $185.6mm (FY’24) of cash through operating activities.

And there it is. Some of that cash burn stems from the fact that, impressively (or rather … unfortunately?), the company has been looking to become as vertically integrated as possible. Indeed, MULN has been striving to manufacture its batteries in house since inception. In ‘23, the company acquired $3.5mm of battery pack production assets from Nikola Corp ($NKLA) subsidiary, Romeo Power. Fun fact: NKLA originally bought Romeo back in ‘22 for $144mm (with the goal to “bring battery pack engineering and production in-house”). It took NKLA less than a year to realize that was money-bad and it then moved to liquidate Romeo and MULN was happy to step in. A distressed asset buyer! Nice work, MULN!
Battery manufacturing really is the ĒV industry’s game of hot potato. Hmmm, we wonder why.
The company has yet to produce a single battery unit yet but, if all goes well, the first units are set to leave the factory this year. Meanwhile the company has burned through $152.3mm in R&D in the past two fiscal years. Not all of that was on battery production but building up a battery manufacturing facility is f*cking tough. Just ask Northvolt AB:
And iM3NY LLC:
The company does have outstanding funded debt … kinda. See below for an excerpt from the company’s 10-K:
Wait? A cross-default? What’s that about? From the 10-K:*
“As of September 30, 2024, the Convertible Notes were in cross-default as the Company had not paid a part of the notes that matured during September 2024. As a result, the interest rate on the Convertible Notes increased from 15% to 20%. Although the investors could request immediate payment in cash, the investors did not demand payment. In December 2024, a settlement agreement between the Company and holders of the Convertible Notes was approved by a court, and, as of the date of this Report, almost full amount of the Convertible Notes, including accumulated interest, has been converted to shares of common stock.”
“The investors” include a long time supporter of MULN, New York-based family office, Esousa Holdings LLC (“Esousa”). Esousa holds 9.9% of MULN’s common stock and has historically financed the company through convertible notes. Convertible notes that have absolutely tanked the price of the company’s stock:
The company had $10.3mm in cash as of September 30, 2024 which, by management’s own admission, isn’t enough to cover the next twelve months of operations. But apparently there’s still enough dry powder to acquire some more battery assets from Nikola, including a production line and a testing system. According to a January 30, 2025 press release, MULN is now looking for $55mm in matching DOE funds to get the battery facilities up to speed. What happens if it doesn’t get it? 🤔
All of this makes us wonder: who are the people behind MULN?
Esousa is managed by a certain Michael Wachs. Decades prior, in ‘97, Mr. Wachs was convicted of embezzlement charges after defrauding Chase Manhattan Bank for $20.8mm.
And the fun doesn’t stop there. CEO and founder, David Michery, has, according to Hindenburg Research, been at the helm of 5 failed penny stock companies prior to MULN. The Hindenburg report also goes through a laundry list of shady dealings by Mr. Wachs, Mr. Michery, and other large shareholders. We recommend giving it a read because it’s more entertaining than the latest season of Severance. This part, in particular, resonated with us:
“We have seen this story before, but Mullen strikes us as one of the worst. With echoes of Nikola, Lordstown, Kandi and Ideanomics, we think Mullen is just the latest in a long line of EV hustles.”
Hang on, y’all. Let’s check the archive:
📍NKLA — on the verge of bankruptcy (see above). ✅
📍Lordstown Motors — already bankrupted. ✅
📍Kandi Technologies Group Inc. ($KNDI) — stock trading at $1.06/share, down ~59% over the past year and ~74% over the past five years. ✅
📍Ideanomics Inc. — already bankrupted. ✅
To close, we point you to Mr. Michery’s personal website — because of course he, too, has one.
Another very punchable face. 🤛
*The matured notes and loan advances were also settled with the issuance of $3mm worth of common stock.
⚡Update: Hyzon Motors Inc. ($HYZN)⚡
Sticking with the “decarbonization” theme, we last covered the hydrogen fuel cell company Hyzon Motors Inc. ($HYZN) back in October of last year with this highly appropriate title:
The company was (quite fittingly) focused on the garbage industry; its business has been a total dumpster fire. Take a look for yourselves (and hold your noses):

That’s $100mm down the drain and 130 jobs lost in 1 year.
You’ll also recall from our previous coverage that the company reportedly retained PJT Partners ($PJT) in June ‘24 as financial advisor to lead capital raising efforts. Care to hazard a guess as to how that process went? We’ll spare you the suspense …

Without further capital we now end up with … a plan of dissolution!
“On December 19, 2024, the Board of Directors (the ‘Board’) of Hyzon Motors Inc. (the ‘Company’) unanimously approved, subject to stockholder approval, (i) the transfer of all or substantially all of the Company’s assets through an assignment for the benefit of creditors (the ‘Assignment’), and (ii) the liquidation and dissolution of the Company pursuant to a plan of dissolution (the ‘Dissolution’) while continuing to pursue strategic alternatives and potential funding sources intended to maximize the value of its business and assets.”
And to that end, the company has engaged Riveron Management Services, LLC’s Glenn Kushiner to serve as CRO for a cool $750/hr.
And if it wasn’t clear enough, here’s an excerpt from the company’s proxy statement:
“As explained in this proxy statement, assuming approval of the Assignment Proposal, all or substantially all of our assets will be assigned to an Assignee who will liquidate such assets for the benefit of our creditors.”
The company will be hosting a special meeting of stockholders on February 13, 2025 at 9am ET to vote on the dissolution. The stock is already delisted from the Nasdaq as of January 30, 2025.
A well trodden recent path to bankruptcy/liquidation seems to be paved with good intentions (ESG).
⚡ ️Update: Ligado Networks Corp.⚡️

Exactly one month ago, on January 5, 2025, Ligado Networks Corp. and ten affiliates (collectively, the “debtors”) filed chapter 11 bankruptcy cases in the District of Delaware (Judge Horan), which we covered here:
If you recall, the debtors’ proposed DIP provides $442mm in new money ($12mm interim), but ~$327mm of that “new” money will be used to refinance the debtors’ prepetition 1L first out loan. So really, it’s ~$115mm of “new” new money and otherwise a roll-up by any other name. In addition to that refinancing, the DIP also includes a straightforward, cashless roll-up of $442mm-$497mm of other non-first out 1L debt. So calling a spade a spade, it’s a 6.7 to 7.2x roll-up all-in, all subject to the final DIP order.
Typically, we’d expect the recently-empowered Office of the US Trustee (the “UST”) or, once appointed, an official committee of unsecured creditors (the “UCC”) to take issue with that: higher ratios being objectionable and all for “reasons.” In this case, the UST was either asleep at the wheel or didn’t care,* and there’s no UCC in these cases, though that isn’t for lack of trying. The UST just couldn’t garner enough interest and threw in the towel on January 16, 2025. But perhaps that was to be expected because, after all, the debtors’ restructuring support agreement (the “RSA”), which has the support of 88% of the debtors’ prepetition funded debt, intends to ride general unsecured creditors (“GUCs”) through the bankruptcy unimpaired.
Well, Inmarsat Global Limited (“Inmarsat”),** an alleged unsecured creditor and unquestionable defendant of a debtor-filed adversary complaint,*** couldn’t stand for that and took it upon itself to “fill the roll [sic] of estate watchdog and ensure some adversarial process is effectuated to ensure that any DIP Financing is in the estate’s best interest.” On January 29, 2025, it filed a DIP objection, which, in addition to hating on the roll-up, picks fights about the DIP’s ~$100mm in fees, 17.5% interest rate, 120-day maturity (subject to five additional 120-day, lender-approved extensions), “other” overreaching terms (spoiler alert: it was the typical waivers), and, of course, the Delaware-standard 75-day lien challenge period. Such a fiduciary. Truly a shame (for Inmarsat) that its fees aren’t being paid by the estates, but, lol, it tries to fix that too by tossing in a token, unsupported, and throwaway request that Inmarsat’s “work should be given superpriority status under Bankruptcy Code section 503(b)(9) as a ‘substantial contribution’ in these cases.” Superpriority status? On what basis? Only Inmarsat could tell you.
To be blunt, aside from maybe the roll-up argument, the objection sucks, and even we — as card-carrying supporters of pushback on debtor bullsh*t — are puzzled by why Inmarsat chose to pursue it. The roll-up itself, including the refinancing, isn’t even the highest ratio we’ve seen approved, and more to the point, no one other than the DIP lenders, including Inmarsat, offered up financing, despite the debtors having had, as their counsel Milbank LLP (“Milbank”)(Dennis Dunne, Matthew Brod, Lauren Doyle, Andrew Leblanc) put it, “the help of some of the most highly qualified restructuring advisors in the world.” That’s right, the WORLD.

Here’s a list of problems this humble PETITION team was able to immediately identify: (i) the RSA’s term sheet contemplates that GUCs will “ride through [the bankruptcy] unimpaired”, so after DIP fees and all, Inmarsat will be paid every penny it’s ultimately owed, (ii) those “excessive” fees are backstop, commitment, and funding discount fees that the court approved via the interim DIP order****, and, oh, they’re paid in kind, not cash, so the debtors are currently out of pocket to the tune of nil dollars and null cents, (iii) the interest rate is the same as was in effect on the petition date under the debtors’ prepetition 1L facility, and (iv) there’s nothing special about the waivers or the challenge period: each uses the standard language approved time and time again. All of this was in documents filed right there on the publicly-available (and free!) court docket, well ahead of the objection.
You can see where this is going, so it shouldn’t come as a surprise that each of the debtors, the ad hoc 1L group,***** and the ad hoc cross-holder group****** sh*t on the objection. In addition to thinking it’s meritless, they all believe Inmarsat is trying to blow up the deal because of its “clear ulterior motive of obtaining the Debtors’ valuable spectrum rights, [which] clearly illustrates that Inmarsat is not looking out for the best interest of the Debtors’ estates.” The cross-holder group goes on to point out “Inmarsat’s best prospect for a full recovery [as a GUC] is the restructuring transaction already on the table” because it’s already sitting behind a f*ckton of debt …

… and if there's a risk this unsolicited “watchdog” doesn’t get paid, fees amounting to ~1% of the prepetition secured debt won’t change that.
On the roll-up ratio, Milbank did its best to distinguish the refinancing from the traditional roll-up, going as far as calling the 1L first out loans “a ‘pre-DIP DIP’ with the expectation of the parties that they would be refinanced as part of a bankruptcy process.” We weren’t convinced — “pre-DIP DIP” is just legal gibberish for a preferred prepetition loan — which is why we didn’t totally hate that one argument, but unless Judge Horan intends to engage in some judicial bullying, the debtors should win the day simply because there’s no other source of cash. Money talks.
On the other issues, the debtors et al. made the arguments we identified☝️ and, on maturity, took the easy road out by drawing everyone’s attention to the fact that the DIP lenders have been funding the business since October ‘20 — that’s … counting fingers … 4.5 years — without receiving “a single cash interest payment” and “there is no reason to believe that the DIP Lenders … will suddenly pull the rug out from under them.” So even with the DIP’s initial four-month maturity date, the debtors are expecting the lenders to keep on extending and then work something out at the two-year mark so long as the cases haven’t gone off the rails. We buy that, and again, Inmarsat ain’t offering anything better (or at all).
The hearing on the DIP and objection is scheduled for later today at 1pm ET, where we expect the court to have little or no problem overruling any part of Inmarsat’s objection not withdrawn or resolved ahead of then.
* We tried pulling the first day hearing audio to figure out what happened there, but the court, lol, forgot to attach it to the filing. Maybe the UST was preoccupied with objecting to the break-up fee contemplated by the debtors’ RSA-proposed transaction with AST & Science, LLC, which, of course, was resolved consensually.
** Inmarsat is represented by Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Timothy Cairns), Steptoe LLP (Jeff Reisner, Charles Michael, Alfred Mamlet, Joshua Taylor), and Quinn Emanuel Urquhart & Sullivan LLP (Ben Finestone).
*** As of writing, the adversary case’s complaint is still under seal.
**** The debtors report that Inmarsat “participated in the [first day hearing] and at no time raised this (or any other) issue with the Court’s approval of the DIP Fees in the Interim DIP Order[.]” Since the court didn’t do us any favors on that audio, we’ll take them at their word.
***** The ad hoc 1L group is represented by Sidley Austin LLP (Stephen Hessler, Dennis Twomey, Jason Hufendick, Ian Ferrell) and, per docket no. 172, is composed of funds managed by Apollo, Avenue, Bardin Hill, Bank of America, Capital Research, CastleKnight, HBK, Impax, Oaktree, Owl Creek, and Roystone.
****** The ad hoc cross-holder group is represented by Kirkland & Ellis LLP (Josh Sussberg, Brian Schartz, Pat Nash, Derek Hunter, Alan McCormick) and, per docket no. 113, is composed of funds managed by Cerberus Capital Management L.P., Fortress Credit Advisors LLC, Hudson Bay Capital Management, LP, Rubric Capital Management LP, BlackRock Financial Management, Inc., MSD Partners, L.P., and Philosophy Capital Management LLC.
📚Resources📚
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.
📤 Notice📤
Eric Wise (Partner) joined King & Spalding LLP from Alston & Bird LLP.
Henry Thomas (Associate) joined Dentons from Thompson Coburn LLP.
John Sobolewski (Partner and Global Chair of Liability Management) joined Latham & Watkins LLP from … gulp … Wachtell.
Lisa Laukitis (Partner) joined Milbank LLP from Skadden Arps Slate Meagher & Flom LLP.
Matthew Kelsey (Partner) joined King & Spalding LLP from Alston & Bird LLP.
🍾Congratulations to…🍾
Brown Rudnick LLP (Bennett Silverberg, Hayden Miller, Alexander Kasnetz, Elizabeth Castano) and Potter Anderson & Corroon LLP (Christopher Samis, Aaron Stulman, Sameen Rizvi, Ethan Sulik, Sarah Gladieux) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Wynne Transportation Holdings LLC chapter 11 cases.
Kelley Drye & Warren LLP (Jason Adams, Eric Wilson, Maeghan McLoughlin, Andres Barajas) and Pachulski Stang Ziehl & Jones LLP (Bradford Sandler, James O’Neill) for securing the legal mandate on behalf of the official committee of unsecured creditors in the JOANN Inc. chapter 11 cases.
Lowenstein Sandler LLP (Gianfranco Finizio, Bruce Nathan, Michael Papandrea, Chelsea Frankel) and Tydings & Rosenberg LLP (Stephen Gerald) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Diamond Comic Distributors Inc. chapter 11 cases.
Morgan Patterson on becoming the new leader of Womble Bond Dickinson LLP’s Bankruptcy, Restructuring and Creditors’ Rights team.
Paul Hastings LLP (Kristopher Hansen, Erez Gilad, Gabriel Sasson, Charles Persons, Emily Kuznick, Matthew Friedrick) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Prospect Medical Holdings Inc. chapter 11 cases.
🗓️ Upcoming Event!🗓️
On Thursday, March 13 & 14, 2025, the NYU Stern Altman-Paulson Initiative on Credit & Distressed Opportunities is hosting, together with the LSTA and Creditor Rights Coalition, its 2025 Credit Opportunities Symposium at the NYU Stern School of Business. The event features keynote speakers from Apollo and Avenue Capital Group and panelists from, among others, King Street, Carlyle, Moelis & Company and Davis Polk & Wardwell LLP. You can find more information about the event here and you can register here. Interested in going? Three lucky (paying) subscribers of PETITION are eligible to attend for free (a $100 value). Email us at petition@petition11.com and we’ll choose three winners at random.