Electric Last Mile Solutions

Electric Last Mile Solutions (ELMS) was a commercial electric vehicle startup that went public in June 2021 through a merger with SPAC Forum Merger III Corp., raising $379 million in a deal valued at $1.4 billion.¹⁸ On June 12, 2022, ELMS announced its intention to file for Chapter 7 bankruptcy, and it filed for Chapter 7 liquidation in Delaware on June 14, 2022, becoming the first EV startup that went public via SPAC to collapse.¹³⁴⁵⁷⁸

Timeline

Money raised

ELMS went public through a merger with Forum Merger III Corp., a SPAC, in a deal valued at $1.4 billion.¹⁸ The PIPE Offering was consummated in June 2021 in connection with the closing of the merger to raise additional funds.¹² ELMS was unable to attract new investment, which led to the decision to file for Chapter 7 bankruptcy.¹ The owner of the Mishawaka plant agreed to cut mortgage payments on the plant for four months while the company tried to raise new funding.¹

Investors named in the sources: Forum Merger III Corp.¹⁸¹⁰¹², BDO USA, P.C.¹⁴.

What happened

Electric Last Mile Solutions (ELMS) was a commercial electric vehicle company focused on the last mile of deliveries.¹² ELMS was formed through the merger of Electric Last Mile, Inc. and Forum Merger III Corp., a special purpose acquisition company, on June 25, 2021.¹⁰¹² The business plan included building Class 1 last-mile electric delivery vans with imported bodies from China that would be married to electric chassis at a former General Motors plant in Mishawaka, Indiana.¹ ELMS produced the Urban Delivery electric van, one of the first light-duty, fully electric vehicles meant for contractors, delivery workers, and more.³ ELMS went public a year before its bankruptcy following a December 2020 merger with Forum Merger III Corp., with the deal valued at $1.4 billion.¹

On November 25, 2021, ELMS's Board formed a Special Committee to conduct an inquiry into certain sales of equity securities made by and to individuals associated with ELMS.¹⁰ The Special Committee's investigation found that in November and December 2020, shortly before the December 10, 2020 announcement of a definitive agreement for the merger, certain Electric Last Mile Inc. executives purchased equity in ELMS at substantial discounts to market value without obtaining an independent valuation.¹⁰ Following the investigation, James Taylor resigned from his role as Chief Executive Officer and a member of the Board, and Jason Luo resigned from his position as Executive Chairman of the Board.¹⁰ ELMS's Board concluded that its previously issued consolidated financial statements should be restated and should no longer be relied upon.¹⁰ The financial statements in question covered the period as of December 31, 2020, the period from August 20, 2020 (inception) through December 31, 2020, the six months ended June 30, and the nine months ended September 30, 2021.¹⁰

Following this news, ELMS's share price fell $2.88 per share, or 51%, to close at $2.71 per share on February 2, 2022.¹⁰ On March 11, 2022, ELMS confirmed an ongoing U.S. Securities and Exchange Commission investigation and disclosed that it was withdrawing its previous financial guidance.¹² ELMS also disclosed that it was suffering production and launch delays for its vehicles and that it would need to raise additional capital in order to continue its launch plans.¹² ELMS recently laid off about 24% of its staff after going public in June 2021.³ The owner of the Mishawaka plant agreed to cut mortgage payments on the plant for four months while the company tried to raise new funding.¹

ELMS was unable to attract new investment.¹ On June 12, 2022, ELMS announced its intention to file for Chapter 7 bankruptcy.³⁷ In an 8-K filing with the SEC, ELMS said its board and outside advisers determined a Chapter 7 liquidation filing was the best solution after the company was unable to attract new investment.¹ On June 13, 2022, ELMS stock tumbled 61.59% to close at 20 cents a share on the Nasdaq.¹ The Nasdaq told the company it had 180 days to get its stock price above $1 a share or face delisting.¹

On June 14, 2022, ELMS filed for Chapter 7 bankruptcy in Delaware.⁴¹⁶ ELMS became the first of the electric-vehicle startups that went public via SPAC to file for Chapter 7 bankruptcy.⁴⁸ Interim CEO Shauna McIntyre said, "Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us."¹ Board chair Brian Krzanich said, "Therefore, it's extremely frustrating that we must take this route, but it was the only responsible next step for our shareholders, partners, creditors and employees."¹ McIntyre, Krzanich, and Richard N. Peretz tendered their resignation as board members effective when the bankruptcy trustee takes control of ELMS' affairs.¹

On September 16, 2022, the bankruptcy estates of ELMS and Electric Last Mile, Inc. entered into an Asset Purchase Agreement with Mullen Automotive Inc.¹⁵ A securities class action was filed on behalf of investors who purchased ELMS securities between March 31, 2021 and February 1, 2022.¹⁰ The class action alleged that defendants made false and misleading statements and failed to disclose that ELMS's previously issued financial statements were false and unreliable, among other things.¹⁰ On November 6, 2024, the court granted final approval of the class action settlement with the individual defendants.¹⁴¹⁶ On July 24, 2025, the court issued an order approving distribution of the settlement fund for the settlement approved on November 6, 2024.¹⁶

On December 5, 2025, a federal district judge in Delaware dismissed securities claims against all defendant board members and the former chairman of ELMS.¹⁷ On June 18, 2026, the court granted final approval of the class action settlement with defendant BDO USA, P.C.¹⁴

Legal outcomes

• filedA class action lawsuit was filed on behalf of those who purchased or acquired ELMS securities between March 31, 2021 and February 1, 2022, alleging securities fraud violations.¹⁰
• settledThe individual defendants agreed to pay $2,700,000 to resolve claims alleging violations of federal securities laws by making false or misleading statements.¹⁴
• settledBDO USA, P.C. agreed to pay $899,000 to resolve claims alleging violations of federal securities laws by making false or misleading statements.¹⁴
• settledOn November 6, 2024, the court granted final approval of the class action settlement with the individual defendants.¹⁴¹⁶
• settledOn June 18, 2026, the court granted final approval of the class action settlement with defendant BDO USA, P.C.¹⁴
• dismissedA federal district judge in Delaware dismissed securities claims against all defendant board members and the former chairman of ELMS.¹⁷

Where the founders are now

James Taylor resigned from his role as Chief Executive Officer and a member of the Board in February 2022.¹⁰ Jason Luo resigned from his position as Executive Chairman of the Board in February 2022.¹⁰

Sources

1. Electric Last Mile Solutions files for bankruptcy liquidation, FreightWaves, 2022-06-13
3. Electric Last Mile Solutions (ELMS) to File for Bankruptcy, Automotive Fleet, 2022-06-14
4. EV-Truck Startup Electric Last Mile Files Chapter 7 ..., bloomberg.com, Jun 14, 20
5. Troy-based EV startup Electric Last Mile Solutions to liquidate, detroitnews.com, Jun 13, 20
7. Electric Last Mile Solutions company information, funding & ..., app.dealroom.co
8. An electric automaker valued at $1.4 billion last year is already folding. Buckle up for more carnage | Fortune, Fortune, Jun 13, 20
9. How Much Money Has Electric Last Mile Solutions Raised?, startupfundraising.com
10. Kessler Topaz Meltzer & Check, LLP: Investor Class Action Filed Against Electric Last Mile Solutions, Inc. (ELMS; ELMSW) f/k/a Forum Merger III Corp. (FIII; FIIIU; FIIIW) for Securities Fraud Violations | New Cases | Kessler Topaz, Kessler Topaz
12. Electric Last Mile Shareholder Action Reminder, TMX Newsfile
14. Electric Last Mile Solutions, Inc. f/k/a Forum Merger III Corp. Securities Fraud Class Action | New Cases | Kessler Topaz, Kessler Topaz
15. Asset Purchase Agreement dated September 16, 2022 ..., sec.gov
16. Securities Class Action Clearinghouse: Case Page, securities.stanford.edu, Feb 3, 202
17. Electric Last Mile Solutions Board Wins Dismissal of Federal Securities Action in Delaware, Paul, Weiss, Dec 5, 202

How this case file was put together

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