Nikola is paying $8.1 million in legal fees for ousted chairman Milton

Embattled electrical truck start-up Nikola is paying $8.1 million in legal professional charges for ousted founder and chairman Trevor Milton, who left the corporate in September following fraud claims by a short-seller that prompted federal inquiries.

That helped drive the corporate’s authorized bills final yr to $27.5 million. Most of that, $24.7 million, was spent responding to regulatory probes and different litigation associated to the claims by Hindenburg Analysis, Nikola stated in its annual submitting Thursday to the Securities and Change Fee.

About $1.5 million of Milton’s authorized charges had been paid in 2020, in accordance with the corporate. The beginning-up misplaced $384.3 million final yr, together with $147.1 million within the fourth quarter, it stated Thursday. It is loss on an adjusted pretax foundation was $200.5 million in 2020.

As a part of its earnings, Nikola additionally lowered supply expectations of its first product known as the Tre semitruck from 600 this yr to between 50 and 100 attributable to provider points. Shares of the corporate had been level-to-down throughout afterhours buying and selling after closing Thursday at $19.72 a share, down 6.8% for the day.

“The pandemic has brought on important provide chain disruptions,” Nikola CEO Mark Russell stated throughout an earnings name, particularly citing a battery cell scarcity to energy its autos.

A Nikola spokeswoman declined to touch upon whether or not the corporate will try and recoup any of Milton’s authorized charges. In its submitting, Nikola stated the charges had been a part of his indemnification settlement with firm. It expects to incur extra authorized prices this yr associated to the Hindenburg report, which has led to inquiries by the SEC and Division of Justice.

“We’ve got incurred important bills because of the regulatory and authorized issues regarding the Hindenburg article,” Nikola stated within the submitting. “The overall value related to these issues will rely on many elements, together with the length of those issues and any associated discovering.”

Hindenburg accused Milton of making false statements about Nikola’s know-how in an effort to develop the corporate and companion with auto corporations. The report, titled “Nikola: The right way to Parlay An Ocean of Lies Right into a Partnership With the Largest Auto OEM in America,” was launched two days after the corporate introduced a cope with Common Motors that despatched each corporations’ shares hovering in September. It characterised Nikola as an “intricate fraud constructed on dozens of lies” by Milton.

Nikola has denied and disputed lots of the accusations, nonetheless the corporate confirmed one among Hindenburg’s greatest claims — that it staged a video exhibiting a truck that seemed to be practical however wasn’t.

An inside investigation by Kirkland & Ellis LLP has been “considerably accomplished” concerning statements by Milton and the corporate throughout that point, in accordance with the submitting. No conclusion has been made by the Chicago-based regulation agency as as to if any statements which will have been inaccurate when made violated any statute, in accordance with the corporate.