TuSimple Co-Founder Calls for $450M Liquidation Amid Legal Turmoil

TuSimple Co-Founder Demands Liquidation Amid Legal Battle

Xiaodi Hou, co-founder and former CEO of autonomous trucking company TuSimple, has launched a campaign demanding the liquidation of the company. Hou proposes returning $450 million to shareholders on a pro-rata basis, a move he claims could offer a 700% premium over current stock values.

The demand comes amid a complex legal battle involving TuSimple’s leadership and co-founder Mo Chen. Hou has filed lawsuits challenging voting rights and alleging asset diversion to China. To promote his liquidation plan, Hou created SaveTuSimple.com, highlighting the potential benefits for shareholders.

Hou’s concerns extend beyond financial matters. He has accused TuSimple’s current leadership of mismanaging company assets and raised alarms about a new AI-generated animation and gaming unit. These allegations follow previous shareholder concerns about self-dealing within the company.

In response to these issues, Hou has requested a temporary restraining order to prevent asset transfer to China. TuSimple has countered with litigation against Hou, accusing him of trade secrets theft.

The conflict has escalated to the Delaware Chancery Court, where Hou filed a lawsuit seeking to postpone TuSimple’s annual shareholder meeting. This move is part of a strategy to solicit proxies and gather investor support for his liquidation plan.

TuSimple’s shareholder composition adds another layer of complexity to the situation. Major stakeholders include Sun Dream, Traton, Vanguard, BlackRock, and Camac Partners. While Camac Partners has expressed support for keeping funds in the U.S., other major shareholders have yet to respond publicly.

At the heart of the dispute is a 2022 voting agreement between Hou and Chen, which has since expired. Despite this, Chen claims to control majority voting power, a stance reaffirmed in recent SEC filings. TuSimple’s failure to file required updates post-delisting has further complicated the situation.

The upcoming shareholder meeting could prove pivotal, with proposals on the table to change the board structure. Critics argue that creating a classified board could entrench Chen’s control and limit shareholder influence.

As the conflict unfolds, a scheduled hearing aims to expedite review of Hou’s complaint, potentially shaping the future of TuSimple and its shareholders.