The recently-pardoned founder of Nikola, Trevor Milton, has been fighting a subpoena from the creditors of his bankrupt electric trucking company.
The official committee of unsecured creditors in the bankruptcy case sent the subpoena to Milton’s lawyers on April 1, according to a recent filing. Milton owed Nikola nearly $100 million before it filed for bankruptcy in February, which followed an arbitration case with the company in 2023 related to his criminal conviction that he lost.
The committee says Milton still hasn’t paid, and is trying to use the subpoena to determine the current state of his financial affairs.
Before it went bankrupt, Nikola sued Milton in federal court in Arizona, and accused him of “fraudulently transferring away tens of millions of dollars of his assets in order to hinder, delay, and defraud [Nikola] in [its] attempts to collect upon the Arbitration Award,” according to the committee.
Milton has spent the last two months fighting the subpoena, according to the filing. The company’s lawyers have told the judge they believe the material sought by the creditors is subject to a protective order in the Arizona case.
The fight over the subpoena will likely come to a head during a hearing scheduled for June 9.
Lawyers representing the creditors’ committee and Milton did not immediately respond to requests for comment.
Most of Nikola’s assets have already been sold off in the bankruptcy process. Lucid Motors purchased the leases on Nikola’s Arizona factory and headquarters, and hired around 300 of its employees. An auction company bought Nikola’s remaining fleet of hydrogen-powered trucks.
That has left the arbitration award as one of the largest, and crucial, remaining assets in Nikola’s estate.
Prior to filing for bankruptcy, Nikola was hit with a class action shareholder lawsuit related to the misleading claims it made during the process of becoming a public company. While Nikola settled a case with the Securities and Exchange Commission over those claims, the shareholder lawsuit was still ongoing when the company tipped into bankruptcy.
The plan from the outset of the bankruptcy was to use Milton’s arbitration award to settle the shareholder lawsuit. But Milton “has yet to pay a cent,” the creditor committee said in the filing. Along the way, Milton, who was appealing his four-year prison sentence, was granted a surprise pardon by President Trump. Just a few weeks later, Nikola’s lawyers accused Milton of trying to derail the bankruptcy case.
Meanwhile, Milton has commissioned a documentary that is set to premiere on June 10, which he promises will tell the “true story about how the so called ‘justice system’ nearly destroyed an innocent man.”
Source: techcrunch.com
