No one expected a revival of the tumultuous soap opera starring Nikola Corp. and its controversial founder, Trevor Milton. Yet, here we are.

Into the Courthouse We Dive

In the latest twist of the Nikola Corp. saga involving Trevor Milton, the company that deals with fuel cell trucks and hydrogen fuel distribution faced obstacles in collecting a $167.7 million arbitration award in November. Milton’s attempt to overturn the award in January was the prelude to the latest legal battle.

Nikola filed a lawsuit against Milton in the U.S. District Court for the District of Arizona, pursuing a temporary restraining order under the Arizona Uniform Fraudulent Transfer Act. The aim was to prevent Milton from selling or transferring his company stock until he satisfied his financial obligation.

Court Dismisses Nikola’s Bid for a Restraining Order

The court in Phoenix rejected Nikola’s request for a restraining order, citing insufficient evidence and doubts about the company’s ability to substantiate its claims. However, Milton was mandated to disclose details about the sale of over 37 million Nikola shares through his M&M Residual LLC from February 22 to March 13.

Milton’s Nikola holdings dwindled to just under 13.3 million shares from a previous position that once conferred billionaire status on paper.

Nikola accused Milton of engaging in tactics to impede the company’s efforts to recover the arbitration award, particularly the $83.3 million designated to address an outstanding portion of a $125 million Securities and Exchange Commission penalty imposed on Nikola in 2021 due to Milton’s misleading statements about the company’s technological advancements.

Board Shake-Up Controversy

Nikola speculated that Milton might have distributed shares to existing shareholders to bolster the candidacy of five individuals he nominated for positions on Nikola’s board of directors. Nikola swiftly issued a preemptive news release urging shareholders to reject the proposed slate ahead of June’s board meeting.

In a bold move, Nikola characterized the five nominees as lacking pertinent skills or experience and questioned their ability to contribute meaningfully to the company compared to current board members.

Milton disregarded the court order for information disclosure that was due by Wednesday.

Nikola Responds Firmly in SEC Filing

In a regulatory filing with the Securities and Exchange Commission, Nikola lambasted its “disgraced founder and a convicted felon” for attempting to orchestrate a company takeover by collaborating with purchasers of Nikola assets, including the ill-fated Badger electric pickup truck that was shelved after Nikola’s deal with General Motors disintegrated.

Following the sale of the Badger and Powersports assets to EMBR, a firm predominantly owned by Dave Sparks (popularly known as “Heavy D”) and lawyer Cole Cannon, Milton was barred from any involvement due to the detrimental impact he had on Nikola’s reputation, finances, and operations. Sparks and Cannon, both board nominees proposed by Milton, failed to adhere strictly to the agreement’s stipulations, leading to legal action against EMBR, Cannon, Sparks, and Milton.

Despite holding a 4% stake in Nikola until recently, Milton faces a potential four-year prison sentence for securities and wire fraud. His appeal against the conviction is ongoing, with no surrender date set.

Nikola is in turmoil following Trevor Milton’s actions after sentencing amidst legal battles and boardroom disputes. (Photo: Matthew Lee)

Recalled Vehicles Return to Customers

Nikola remains focused on fulfilling its promise to return recalled fire-prone battery-electric vehicles (BEVs) to customers, despite the distractions caused by Milton and the looming threat of delisting.

In August, Nikola recalled 209 Tre BEVs due to battery fires in a few vehicles, prompting the company to transport the trucks back to its facility in Coolidge, Arizona. The battery packs from Romeo Power, a subsidiary Nikola acquired amid financial challenges, were removed and replaced with battery packs likely from China-based Contemporary Amperex Technology Co.

Nikola anticipates the reintegration of all recalled trucks into customer hands by the end of the second quarter or early third quarter of the year.

Salim Youssefzadeh, CEO of WattEV, expressed optimism, stating, “We’re now seeing the return of our trucks.”

WattEV received the initial two Volvo VNR Electric models from a pending order of 50 trucks. Volvo proactively managed over 400 VNR Electrics by holding onto them until any issues were rectified rather than shipping them back and forth for recalls.

Nikola announced the manufacture and wholesale of 43 fuel cell electric trucks in the first quarter, marking progress amid the organizational strife.

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