Lilium faces legal trouble in the US

Things are not going well for Lilium. The German developer of electric flying taxis recently went into self-administered insolvency. On top of that, there is now the threat of legal hassle in the USA. The company is accused of making false or misleading statements to investors in the months leading up to its insolvency.

According to a report in the German Manager Magazin, the first class action lawsuit against Lilium has been filed overseas. It is said to have been filed in the New York District Court at the beginning of November. According to the business magazine, the lawsuit is directed against the company itself – and specifically against CEO Klaus Roewe and CFO Johan Malmqvist. They are alleged to have made false or misleading statements to investors in the months leading up to the insolvency. The company “exaggerated its progress in fundraising and did not give sufficient warning of impending insolvency,” it is alleged. This inadequate and misleading information supposedly harmed Lilium investors.

Lilium officially filed for insolvency for its two most important subsidiaries in Germany at the end of October – and had already announced this step a few days earlier in a notification to the US Securities and Exchange Commission (SEC). Shortly afterwards, the responsible district court in Weilheim opened proceedings in self-administration. The insolvency affects Lilium GmbH and Lilium eAircraft GmbH – and thus more than 1,000 employees at the administrative headquarters in Gauting, Germany, and at the airport in Oberpfaffenhofen near Munich.

It was quite transparent that Lilium had previously sought state aid in Germany for a long time. However, it had been clear since mid-October that no money would be forthcoming from the German government or the State of Bavaria. The German newspaper Handelsblatt wrote a few weeks ago that in the event of a favourable decision on state aid, the existing investors would also have injected 32 million euros in fresh money. However, this hope vanished into thin air when the Bundestag’s budget committee went against more fiscal support.

In August, during the protracted decision-making phase on state aid, Lilium had already threatened to leave Germany. It is clear whether this is still being considered as part of the reorganisation. However, the electric air taxi developer is currently urgently seeking new investors or a buyer via the business consultancy KPMG.

manager-magazin.de