The ongoing bankruptcy proceedings of electric truck startup Nikola took a dramatic turn during a recent court hearing, as its controversial founder, Trevor Milton, once again inserted himself into the spotlight. A previously routine session involving the court’s approval of Nikola’s asset sale to Lucid Motors was disrupted when a lawyer representing Milton raised concerns, signaling potential future legal battles and further complications for the troubled company.
The bankruptcy court hearing, held via Zoom on Friday, had been progressing without incident. Delaware bankruptcy judge Thomas Horan gave verbal approval for the sale of Nikola’s key assets to Lucid Motors, with no formal objections on record. However, just as the session was winding down, a surprising voice joined the call.
A lawyer for ISSO LLC, a firm tied to Trevor Milton, spoke up, noting that his client had “some concerns” about the auction process that led to the sale. While the attorney did not request an immediate delay or overturning of the sale, he emphasized that ISSO’s silence at the hearing should not be interpreted as full approval of the process. The brief, understated intervention was enough to cast a shadow over what had been a relatively uncontentious proceeding.
Milton’s Continued Influence Over Nikola’s Fate
Trevor Milton, who founded Nikola in 2014 and once led the company as CEO, has remained a controversial figure following his departure. He was convicted in 2022 on fraud charges related to misleading investors about Nikola’s technology and capabilities. However, in a shocking twist earlier this year, he received a pardon from President Donald Trump, sparing him from a four-year prison sentence.
Despite being legally distanced from the company, Milton has remained invested—literally and figuratively—in Nikola’s future. His ties to ISSO LLC have positioned him as a potential bidder for Nikola’s assets, even though the company previously barred him from touring its Arizona manufacturing facility. Judge Horan upheld that ban last week, citing potential disruptions and legal entanglements Milton could introduce.
Lucid Motors Buys Major Assets—But the Drama Isn’t Over
Nikola’s approved sale to Lucid Motors includes significant portions of its physical and human capital. Lucid will acquire Nikola’s factory in Coolidge, Arizona, its Phoenix headquarters lease, and essential manufacturing equipment. Additionally, the EV manufacturer plans to retain approximately 300 Nikola employees.
However, Nikola still holds other assets—such as a fleet of hydrogen-powered big rigs and miscellaneous equipment—that it hopes to sell in subsequent transactions. The lingering involvement of Trevor Milton may complicate these efforts, particularly if legal disputes around the sale’s validity or fairness arise.
A $168 Million Arbitration Award Hangs in the Balance
Central to Nikola’s bankruptcy is a $168 million arbitration award the company won against Milton in 2023. This award has become a cornerstone of Nikola’s plan to settle shareholder lawsuits stemming from Milton’s false statements during his tenure. In essence, the arbitration payout is Nikola’s way of compensating shareholders who were misled during the company’s early, hype-fueled growth.
Any effort by Milton to derail the bankruptcy or the asset sale could indirectly undermine the arbitration award—either by delaying its distribution or by casting doubt on Nikola’s financial position. This possibility was not lost on Nikola’s legal team during Friday’s hearing.
Joshua Morris, a lawyer representing Nikola, responded forcefully to Milton’s eleventh-hour maneuver. He accused Milton of attempting to “taint these proceedings” as part of a long-standing pattern of disruption and manipulation.
“This is a pattern of behavior that we’ve seen over and over,” Morris said during the hearing. “We believe these are baseless assertions. When asked for any evidence or any specificity, none was provided.”
Morris further speculated that Milton’s interference could be a strategic effort to weaken Nikola’s financial standing, making the company appear more vulnerable in hopes of reaching a reduced settlement for the arbitration award.
“Perhaps the play is to render [Nikola] desperate for support cash so that the committee [of unsecured creditors] forces the debtor to attempt or accept some low-ball settlement proposal,” Morris suggested.
For now, Judge Horan’s approval of the Lucid Motors transaction stands. The court hearing ended without any formal delay, and Lucid is expected to move forward with integrating Nikola’s assets into its operations. Still, the door remains open for Milton’s legal representatives to challenge aspects of the sale process in future proceedings.
A spokesperson for Milton declined to comment on the matter, but observers expect him to remain active in the bankruptcy case, particularly if he attempts to overturn or renegotiate the arbitration award.
Nikola’s bankruptcy saga, already marked by controversy and high-profile drama, appears far from over. With Milton’s continued presence and legal pressure mounting, the electric truck startup’s path to closure remains as bumpy as ever.
