$200 Million Insolvency Lifeline Remains Unfulfilled

Lilium, a once-promising air taxi developer, is again teetering on the edge of insolvency as it waits for a $200 million Christmas Eve rescue deal to come through. Meanwhile, employees remain unpaid, operations are on hold, and management is now openly considering filing for insolvency.

Lilium confirmed its first insolvency in October 2024 after failing to secure a bank loan to continue operations. However, a group of investors saved the day with more than $200 mil on Christmas Eve. The company and its staff had some temporary relief before realizing that the paycheck never came through.

The crisis primarily stems from the company's lead investor, InoBat founder Marian Bocek, who was supposed to contribute 75 percent of the total rescue package. While Bocek insists that funds have started to transfer and the “rescue is in full swing,” Lilium’s reality and its employee’s bank accounts suggest otherwise.

With no clear timeline for the rest of the funding, Lilium’s leadership reportedly informed staff in an online meeting that a second insolvency filing is likely unless something changes fast.

The uncertainty has already shattered Lilium’s reputation with not only the industry, but also the company’s own workforce. Shareholder Dr. Vivek Arunchalam stated that “Lilium has burst, and it will soon battle a lot of legal issues which will affect the future prospects of the firm and its success. Even if they overcome these hurdles, the brand name has been affected and the trust in the product has failed.”

Lilium’s struggles are part of a broader meltdown in the German eVTOL industry. Its main competitor, Volocopter, is also insolvent and desperately seeking a bailout. Even Airbus, one of the few major players with the resources to weather industry turbulence, has paused its air taxi project in Bavaria. Meanwhile, Chinese company EHang is already conducting autonomous test flights with passengers and US firms Archer Aviation and Joby are pushing ahead with certification.

Lilium was supposed to file for insolvency (again) on January 14, but reports suggest it has delayed that decision on the promise that the funding will materialize sometime soon.

FMI: https://lilium.com