Lilium draws buyer interest amid insolvency proceedings

Germany-based electric vertical take-off and landing (eVTOL) aircraft manufacturer, Lilium, is seeing significant interest from potential buyers as the sale of its business accelerates. 

However, the company has begun shutting down subsidiaries outside Germany. 

On 28 October, Lilium placed its two primary operating businesses—Lilium eAircraft GmbH and Lilium GmbH—into a self-administration insolvency process due to a severe cash crunch.

Under German insolvency laws, the businesses continue to operate, allowing work on the first conforming Lilium Jet for flight testing to proceed. 

As part of the process, insolvency experts have joined the management board to oversee operations. 

Furthermore, earlier in November, the company appointed accountancy firm KPMG to lead the sale process. 

“We have serious interest and intense discussions and [buyer] visits are ongoing,” said Lilium, as reported by Flightglobal. 

Urgency to finalise sale 

Time, however, is a critical factor. 

Under German federal employment law, employees’ wages are paid for up to three months during a self-administration process. 

For Lilium, this period ends in December, adding urgency to finalise a sale.

Meanwhile, the company’s subsidiaries in Switzerland, the UK, and the US are being closed due to insolvency regulations, resulting in the loss of approximately 45 positions. 

However, its two German businesses continue to employ over 1,000 people.

Moreover, adding to its challenges, the company is also facing legal action in the US. 

On 24 November, law firm Bragar, Eagel & Squire filed a class-action lawsuit against the company in the United States District Court for the Southern District of New York. 

The suit alleges that Lilium misled investors by overstating its fundraising capabilities. 

The claim seeks to represent all individuals who acquired the company’s shares between 11 June and 3 November this year.