Workhorse Under Investigation for False Statements About Postal Contract

Schubert Jonckheer & Kolbe LLP is investigating potential derivative claims on behalf of shareholders of Workhorse Group Inc. (NASDAQ: WKHS) related to the company’s possible false statements regarding its failed attempt to win a key contract with the United States Postal Service (“USPS”) worth between $6.3 and $8 billion and related misconduct.

Between approximately March 2020 and May 2021, investors allege that Workhorse misled them regarding its production capabilities, its backlog of vehicle orders, and the likelihood the USPS would award Workhorse its Next Generation Delivery Vehicle (“NGDV”) contract, which sought to replace about 165,000 aging USPS delivery vehicles. Unbeknownst to shareholders, Workhorse had little to no chance of securing the contract given its inability to manufacture a large volume of vehicles and because the company’s prototypes had suffered numerous failures during testing. On February 23, 2021, the USPS announced the NGDV contract was being awarded to a different company. On this news, the Workhorse’s stock fell $11.82, or 42%, to close at $16.47 per share. The stock has continued to precipitously decline thereafter. Investors further allege that top Workhorse executives and directors sold millions in company stock before this truth came out.

A securities class action pending against the company in the U.S. District Court for the Central District of California has survived a motion to dismiss, paving the way for full discovery. The Securities and Exchange Commission and Department of Justice have also opened investigations.

The Schubert Firm is investigating potential breaches of fiduciary duty by the company’s officers and directors in connection with these allegations.

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