Have the investors in start-up Lightyear been misled? Did the ambitious Helmond company that wanted to make solar cars provide investors with the right information and keep them sufficiently informed? And did the young founders manage the company professionally, so that the investors’ money was not spent irresponsibly?
These questions were before the Enterprise Chamber of the Amsterdam Court of Appeal on Thursday. Curator Maarten van Ingen, who is overseeing the bankruptcy of one of the three bankrupt Lightyear companies, has submitted a request for an investigation into mismanagement. Van Ingen believes that he is not receiving enough information from Lightyear’s directors to assess whether there have been irregularities in this bankruptcy. He wants the Enterprise Chamber to appoint an investigator who will investigate the entire company.
Complicated matter
For years, Lightyear was one of the most acclaimed start-ups in the Netherlands. Originating from a student project at TU Eindhoven, it wanted to bring cars with sunroofs to the market. It has raised more than 200 million euros since its founding in 2016, including from state fund Invest-NL. Until it suddenly went bankrupt at the beginning of 2023 after a short and rapid growth phase. Lightyear was counting on a major investment from industrial group VDL, but that did not materialize.
Van Ingen’s lawyer, Loek Kerstens, asked many questions about business operations in his plea. “There has been an unexpected and extensive bankruptcy, in which 650 people lost their jobs. You can ask serious questions about how money was withdrawn from the market, how it was handled and how it was managed.”
Van Ingen said at the hearing that he wondered whether all investors had always been properly informed about the state of affairs at the start-up. For example, were investors all aware that Lightyear initially only wanted to produce a handful of cars at a factory in Finland, and not around a thousand as previously planned? And was it right that Lightyear thought that VDL would come up with the money anyway?
Van Ingen does not have the impression that he is receiving all the information from the board, and that is why he is asking for a survey. “I have to fight every piece of information I want,” he said in court, “and that has no place in bankruptcy.”
The complexity of the case is that Van Ingen is not the only trustee of bankrupt Lightyear companies. He is formally in charge of the liquidation of a BV where money was collected from investors, called Friends of Lightyear. His colleague Reinoud van Oeijen, who sat next to Van Ingen on Thursday, is the curator of two other Lightyear companies. He has ordered an investigation by forensic accountants from BDO. His lawyer said that the investigation will be ready in January and wondered why Van Ingen does not wait for it.
Lightyear reunion
Thursday’s hearing was a kind of Lightyear reunion. In addition to CEO Lex Hoefsloot and technical director Arjo van der Ham, both founders and involved in the small-scale restart of Lightyear, a number of former stakeholders made an appearance. This includes former financial CEO Mark Bulsink, who worked at Lightyear for barely two months before it went bankrupt.
He made a striking statement on Thursday. Bulsink, who held financial positions at several companies as an interim employee, said he found an understaffed and poorly functioning financial department at Lightyear at the end of November 2022. “The cash planning was not clear. It was not clear where the money went and where we could direct it.” There was no detailed balance sheet, according to Bulsink, sitting right next to the current board. He also believed that there were far too many people employed and the costs had risen too quickly. Moreover, the governance was not in order: a supervisory board was only established in December 2022.
The two commissioners, Bert Bruggeman (ex-Tesla) and Marijn Pijnenborg (founder of Funda) were also present on Thursday. Bruggeman said that when he took office he had the feeling that a deal with VDL was coming. Before he started, he had already spoken to Invest-NL about the inexperience of the board, he explained: the intention was that he would also act as a coach for the young management, which largely consisted of the thirty-somethings who owned the company. set up.
Lightyear’s lawyers argued that there are no valid reasons to doubt the policy pursued, which should be the basis for a mismanagement investigation. The company had every reason to think that the deal with VDL would be successful. It would also have kept investors well informed of changed plans.
Characteristic striped sweater
According to Lightyear lawyer Tom de Clerck, curator Van Ingen is making a mistake: the fact that something went wrong does not mean that wrong action was taken. “Investing in start-ups is inherently risky.” He noted about Bulsink that it is “not surprising that a director tries to minimize his role just before a bankruptcy.”
Arjo van der Ham, head of technology at Lightyear and dressed in his characteristic striped sweater, stated that the company has always carefully considered costs. “The question was always: what do we do, what do we not do? At one point I let three quarters of the external people under me go.” According to Lightyear, the growth in personnel and costs was necessary to work towards factory production of the first car that could drive on public roads.
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The judge said he plans to rule in six weeks on whether there will be an investigation into mismanagement. “But it’s a whole pile of paper. We can’t promise it.”