Nikola Corp. has reached an agreement with the U.S. Securities and Exchange Commission over how to treat roughly $83 million remaining from the electric truck maker’s 2021 civil penalty, clearing a key hurdle as the company’s Chapter 11 liquidation plan moves forward in Delaware.
The settlement, disclosed around plan confirmation proceedings held on September 5, resolves the SEC’s objection to Nikola’s plan by providing a $4 million cash payment and reclassifying the rest of the agency’s claim within the creditor hierarchy, according to court reporting and case docket summaries.
Nikola filed for Chapter 11 protection on February 19, 2025, with about $47 million in cash and a proposal to sell the business or its assets under Section 363 of the U.S. Bankruptcy Code. The company has since marched through key milestones, including approval of solicitation and a September 5 combined hearing on its second amended plan of liquidation.
The SEC’s claim stems from a December 2021 settlement in which Nikola agreed to pay $125 million over two years to resolve fraud charges tied to statements made as the company went public via SPAC. Court records and prior disclosures show Nikola did not complete the full payment before bankruptcy, leaving an unsecured balance the agency sought to protect in Chapter 11.
Before bankruptcy, an arbitration panel—and later a federal judge—ordered founder Trevor Milton to reimburse Nikola roughly $167.7 million, including about $83.3 million corresponding to the unpaid portion of the SEC penalty and tens of millions in related legal costs. Those rulings have factored into negotiations over who ultimately bears the penalty’s economic burden.
Nikola’s collapse capped years of financial strain and recalls that followed the company’s early hype. The Chapter 11 filing detailed a plan to maintain limited service and hydrogen fueling operations through March 2025 while marketing the assets; public filings and reporting described a cash-light runway and an expedited sale timeline.
The SEC, which had argued Nikola’s plan improperly downgraded its civil penalty claim, withdrew its objection after the cash component and reclassification were negotiated, paving the way for confirmation proceedings to continue. A transcript of the September 5 hearing was docketed this week, with the court noting the case’s progress toward a liquidating trust to distribute proceeds.
The company’s downfall unfolded alongside the legal saga of its founder. On Friday, the SEC moved to dismiss its separate civil case against Milton after he received a presidential pardon earlier this year—an action unrelated to the bankruptcy but underscoring the winding endgame of a once high-flying startup.
As the liquidation plan advances, unsecured creditors’ recoveries will turn on asset sale proceeds and the final treatment of disputed claims. With the SEC’s objection resolved and a framework in place for its remaining penalty claim, Nikola’s wind-down now hinges on closing transactions and administering distributions under the court-supervised plan.
Sources: FreightWaves, Reuters, AP News, Law360, U.S. SEC filings
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