Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Nikola Officers and Directors Win Partial Dismissal of Derivative Lawsuit
- Client News
- April 9, 2024
Practices
Paul, Weiss secured a significant victory for certain officers and directors of electric semitruck manufacturer Nikola Corp. when the Delaware Court of Chancery dismissed certain claims brought by purported Nikola shareholders.
The claims arose out of a de-SPAC transaction through which Nikola went public in June 2020 and a subsequent short seller report alleging that Nikola’s founder and executive chairman had made numerous false and misleading statements about the state of Nikola’s technology and business. Shareholders alleged that Nikola’s directors had breached their fiduciary duties by, among other things, permitting Nikola’s founder and executive chairman to resign, rather than terminating him for cause, and that, pre-merger, Nikola’s officers and directors had aided and abetted the SPAC’s breaches of fiduciary duties during the acquisition process.
In a bench ruling, Chancellor Kathaleen McCormick largely granted the partial motions to dismiss, finding that the plaintiffs failed to sufficiently allege wrongdoing with respect to those claims.
The Paul, Weiss team included litigation partners Brad Karp, Susanna Buergel and Gregory Laufer, who argued the motion, and counsel Matthew Stachel.