In a significant development, a US judge has approved the sale of bankrupt electric vehicle (EV) startup Canoo's assets to its CEO, Anthony Aquila, for approximately $4 million in cash. The decision paves the way for Aquila to acquire most of the company's assets, including its intellectual property and contracts with prominent clients such as NASA and the Department of Defense.

The sale was approved by Judge Brendan Shannon, who oversaw the bankruptcy proceedings, after evaluating limited objections from other parties. Notably, Aquila was the only bidder for the assets, despite interest from as many as eight other parties, including electric truck startup Harbinger, which had objected to the sale.

Canoo's bankruptcy is the latest in a series of failures among EV startups, including Fisker, Lordstown Motors, and Nikola. The company's assets will now be used to offer services to its existing customers, including NASA and the Department of Defense, which had purchased Canoo vehicles before the company went under.

Aquila's acquisition of Canoo's assets is not without controversy. Harbinger, which was founded by former Canoo employees, had objected to the sale, claiming that Canoo was hiding assets from potential buyers. Harbinger's lawyers argued that the trustee overseeing the bankruptcy had abandoned his fiduciary duty to the estate by giving Aquila final say over any potential settlement in a lawsuit between Canoo and Harbinger.

The lawsuit, filed in 2022, accuses Harbinger's founders of misappropriating trade secrets when they left Canoo to start their new venture. The outcome of the lawsuit could have significant implications for the sale of Canoo's assets, as a victory for Canoo could bring in a substantial amount of money and potentially block Harbinger from using the allegedly stolen trade secrets.

Despite these objections, Judge Shannon ruled in favor of the sale, citing the trustee's testimony that negotiations with Aquila took weeks and involved multiple offers and counteroffers. The judge also noted that Aquila's relationship to the company was properly disclosed and that the sale was proceeding in good faith.

The sale of Canoo's assets to its CEO raises questions about the role of company executives in bankruptcy proceedings. Lordstown Motors' founder and former CEO, Steve Burns, had similarly bought most of the assets of his company in bankruptcy, while Nikola founder and former CEO Trevor Milton is attempting to do the same with his startup.

The outcome of the sale will be closely watched by the EV industry, which has seen a number of high-profile failures in recent years. As the sector continues to evolve, the fate of Canoo's assets and the implications of this sale will be closely scrutinized by investors, competitors, and regulators alike.