A recent court ruling has sounded the death knell on those hopes, disappointing U.K.-based financier Charles Garson in the process. His goal was to prevent the sale of Canoo’s assets to the company’s CEO, Anthony Aquila. Garson had come up with a bid as high as $20 million but missed the deadline for formal submission. The presiding judge, Brendan Linehan Shannon, ruled in favor of Garson, finding he did not have standing to challenge the sale.
The public relations disaster with regard to Canoo’s asset sale was just beginning to boil over. Garson’s attorney, Jason Angelo, argued that his client did not need to file a formal proposal until the end of April. That deadline period came and went with no official offer from Garson coming. This led to some alarm from the bankruptcy trustee on the feasibility of his bid.
Garson contended that the sale to Aquila had not been conducted in good faith, or at arms length. He had filed his objections before the finalization in April through Harbinger. His legal team released previously sealed transcripts of conversations between Garson and the bankruptcy trustee. As this new submission shows, there is a very complicated history to this case. Garson has yet to detail where the money for his proposed challenge would come from, deepening the confusion and consternation among stakeholders.
The bankruptcy trustee had been opposed to Garson’s bid. He worries that it would face opposition from the Committee on Foreign Investment in the United States (CFIUS). That left plenty of room to raise more doubts, including over the feasibility of his proposal.
Judge Shannon expressed some dismay at Garson’s rage throughout the hearings. He noted, “I am sympathetic to Mr. Garson’s frustration at what I sense and am satisfied is a genuine interest to provide a superior bid and purchase these assets.” He decided in the end that Garson’s standing issues barred any legal action to challenge the sale.
Some at the center of the sale process, including Aquila’s representative Mark Felger, vigorously defended Aquila’s position. He pointed to the long negotiations that led to final agreement. He stated, “But they’re the ones who stepped up, right and we negotiated hard. We went back and forth a dozen times on that agreement.” Felger continued insisting that the sale process was open and above board.
Despite the unfavorable ruling, Garson congratulated Aquila after the court’s decision and expressed his respect for the court’s judgment. Angelo described the case as a “David versus Goliath” battle. He highlighted the difficult obstacles Garson must overcome to fight the sale against one of the world’s most powerful corporations and its billionaire CEO.
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