Trevor Milton, Nikola Founder, Faces Allegations of Sabotaging Bankruptcy Proceedings
The recent court hearing regarding the sale of bankrupt electric truck startup Nikola’s assets to Lucid Motors has drawn attention, especially due to unexpected developments during the proceedings. The Delaware bankruptcy judge, Thomas Horan, initially approved the transaction without any objections. However, a last-minute intervention raised concerns that could affect the outcome of the sale.
Unexpected Objections in the Nikola Sale Process
During the hearing, a lawyer representing ISSO LLC expressed concerns over the auction process. This entity is associated with Nikola’s founder, Trevor Milton, who has been evaluating a bid for his former company’s assets. The lawyer emphasized that he didn’t want his client’s silence to be construed negatively in the future, indicating that further discussions might take place.
Background on Trevor Milton’s Involvement
Trevor Milton, recently pardoned by President Donald Trump, has been navigating complex legal waters following his previous incarceration. He could potentially challenge a $168 million arbitration award he was ordered to pay to Nikola last year, which remains significant in the ongoing Chapter 11 bankruptcy case.
Nikola managed to settle a class-action lawsuit from shareholders related to misleading claims made during Milton’s tenure as CEO. This settlement included the condition of distributing the arbitration award to those shareholders.
Assets and Future Prospects for Nikola
Despite the sale to Lucid Motors, Nikola still retains several valuable assets. The sale included:
- The Coolidge, Arizona, manufacturing facility
- The lease for the Phoenix headquarters
- Manufacturing equipment
- Employment opportunities for approximately 300 Nikola employees
However, Nikola is holding onto its inventory of hydrogen-powered trucks and various other equipment, indicating that the company still has plans to recover and potentially sell these assets in the future.
Legal Perspectives on the Sale
Joshua Morris, Nikola’s attorney, openly questioned the motives behind Milton’s late intervention, suggesting it was part of a recurring pattern aimed at undermining the company’s interests. He stated:
“This is a pattern of behavior that we’ve seen over and over. We believe these are baseless assertions. When asked for any evidence or specificity, none was provided.”
Morris further elaborated that Milton’s actions seemed intended to disrupt the sale process, possibly to influence the arbitration award in his favor. He speculated that Milton might be attempting to place Nikola in a precarious financial position to force a settlement.
Conclusion
As the hearing concluded, the future of Nikola and its assets remains uncertain. With ongoing legal battles and the challenges posed by Milton’s involvement, the company is at a critical juncture. For more updates on Nikola’s bankruptcy proceedings, stay tuned to our news section.
A spokesperson for Milton has yet to respond to requests for comments regarding these developments.
