Trevor Milton Drops $1B Derivatives and Malpractice Lawsuit Against Nikola

Trevor Milton, Nikola Motor’s ex-CEO and founder, dropped his $1B Derivatives and Malpractice lawsuit against Nikola and some of its current and former executives and directors that accused them of various acts of misconduct, illegal business practices, and even potential fraud.

Possibly the biggest focus of the lawsuit being that it alleged, with what was the detailed in the lawsuit as multiple former Nikola employees attesting to this, was that Nikola’s Chief Legal Officer, Britton Worthen, solely coordinated and approved distribution of the famed “Nikola One in Motion” commercial video. This video was a big driver of Milton’s indictment on 1 count of securities fraud and 2 counts of wire fraud charges. This video was meant to make the Nikola One truck at the time, to look as though it were running on its own power, when in fact, it was towed to the top of a hill and rolled down it. Another major piece of this lawsuit was that Milton claimed the company used him as a scapegoat for broader fraud and malpractice within the company so that the others involved wouldn’t suffer legal consequences, and that they “knowingly and intentionally provided the government with false and misleading information that would’ve made Milton’s statements not misleading”.

Milton dropping this suit comes just weeks after Trevor Milton appeared on the Cleared Hot Podcast, showing full intention of bringing these things to light and having the case heard in court. In this 2 hour and 37 minute podcast, Trevor Milton broke down specifically many of the things involved in this suit and exuded confidence in his evidence and ability to win the case, suggesting no reason for him to drop the case just weeks later. He goes in to great detail about what he alleges in the lawsuit, getting into specifics of what he believes is damning evidence.

It’s unknown exactly why the lawsuit was dropped, but it’s almost certainly the case that something happened behind the scenes in order for it to occur. More on this under the “Our Opinion” section below, along with Nikola’s response and statement on the matter.

Nikola is set to report their Q2 Earnings on August 9th, in which analyst expectations are that they’ll report $22.73M in revenue and a loss of $2.78 per share. They wholesaled 72 trucks to dealers for the quarter, the most they’ve ever sold in a single quarter.

OUR OPINION

If Milton showed full intentions of bringing this case to the courts and providing all this evidence with from his begs the question, why was this case dropped? This was a case that was in large part meant to prove his innocence in many ways, and if any of it were true, it would’ve been very damaging to Nikola and the executives and directors involved in the suit. Of course he would want to prove his innocence by any means possible, so dropping this suit seems very counterintuitive to that on the surface. It’s almost certain that something occurred behind the scenes for this to happen, Milton wouldn’t drop a case that’s supposed to prove his innocence for nothing. It’s highly likely that either Nikola

A) Worked out some sort of deal or settlement with Milton, in exchange for him dropping the lawsuit

Or

B) Nikola threatened to counter-sue Milton in a way that was concerning enough to him that he thought it was worth dropping the suit to avoid it

It could be something else, but these are the 2 most plausible here and the most common scenarios in the court system, although, generally companies don’t make deals or settle cases with people convicted of fraud too often, as this generally would be considered a bad look for the company.

We reached out to Nikola to request for comment raising these concerns, stating that there was clearly something that happened behind the scenes that prompted Milton to drop the case. They got back to us but decided not to directly respond to this inquiry, and provided us with the following statement they have given to other publications that reported on this:

”The Nikola team is pleased to put these baseless claims behind us and continue our mission of delivering technologically advanced zero-emission Class 8 trucks. We have consistently prevailed against Mr. Milton’s distractions and remain focused on decarbonizing the trucking industry.”