Nikola Corporation: D. Del. Case 25-10258 363 Sale and Liquidating Plan

Nikola Corporation (NASDAQ: NKLA), the hydrogen fuel cell truck manufacturer that briefly surpassed Ford Motor Company's market capitalization at nearly $30 billion during the 2020 SPAC boom, filed for chapter 11 bankruptcy on February 19, 2025, in the U.S. Bankruptcy Court for the District of Delaware (Case No. 25-10258). The company completed a 363 sale of substantially all assets and confirmed a liquidating plan; control passed to a Liquidating Trust on December 12, 2025. The Phoenix-based company entered bankruptcy with over $1 billion in liabilities against assets valued between $500 million and $1 billion after failing to find a buyer or raise capital despite approaching more than 20 potential acquirers and 24 financial investors in the months preceding the filing.

The company moved from a SPAC-era peak to liquidation in under five years. Founder Trevor Milton's October 2022 securities fraud conviction was followed by reduced access to capital markets, while production volumes remained at about 600 vehicles manufactured since 2022. When Milton received a presidential pardon from Donald Trump in early 2025—weeks after the bankruptcy filing—it enabled him to file disputed claims against the estate through his entity ISSO, LLC.

SPAC Boom: Rise and Fall

Nikola Corporation's trajectory from two-person startup to $30 billion market capitalization to chapter 11 liquidation tracks the 2020 SPAC boom. The company's rise provides context for the subsequent bankruptcy.

Origins and the Nikola One Vision.

Trevor Milton founded the company in 2014 in Salt Lake City, Utah, initially under the name Bluegentech, with a $2 million investment from Worthington Industries. The company outlined a plan to develop hydrogen fuel cell technology for commercial trucking when Milton unveiled the Nikola One, a hydrogen-fueled Class 8 semi truck, in 2016. The unveiling generated industry attention and reportedly produced 7,000 pre-orders amounting to over $2.3 billion in potential revenue. The company's name, derived from inventor Nikola Tesla, reflected the founder's focus on commercial trucking.

In 2018, Anheuser-Busch placed a provisional order for up to 800 leases of the Nikola One. These announcements drew media coverage and investor interest, setting the stage for the company's eventual public listing.

The VectoIQ SPAC Merger.

Nikola went public through a merger with VectoIQ Acquisition Corp., a special purpose acquisition company that had raised $200 million in its May 2018 IPO. VectoIQ stockholders approved the business combination on June 2, 2020, and on June 4, 2020, the combined company's shares began trading on NASDAQ under the ticker symbol NKLA. The SPAC merger implied an enterprise value of approximately $3.3 billion, with a $525 million private placement led by Fidelity supporting the transaction.

Within weeks of the public listing, Nikola's market capitalization reached $30 billion—briefly surpassing Ford Motor Company. Milton's net worth reached approximately $12 billion at the peak. The company became, as CNBC later characterized it, the "pinnacle of auto startups to go public through SPAC mergers."

The GM Partnership and Its Collapse.

On September 9, 2020, Nikola announced a partnership with General Motors. GM agreed to engineer and manufacture the Nikola Badger, an electric pickup truck, and committed $2 billion worth of in-kind services. GM was also to become the exclusive provider of fuel cells for Nikola's Class 7 and 8 trucks in North America.

The partnership shifted soon after. Just one day after the GM announcement, short-seller Hindenburg Research published a fraud report. While GM initially remained committed, the subsequent fraud allegations led GM to back out of the original agreement and work out a reduced fuel cell supply arrangement only, eliminating the Badger development program and the broader strategic alliance.

The Hindenburg Report and Fraud Unraveling

The September 2020 Hindenburg Research report marked the beginning of Nikola's decline and was followed by SEC enforcement actions and criminal prosecution.

Hindenburg Research Allegations.

On September 10, 2020—two days after the GM partnership announcement—Hindenburg Research published a report labeling Nikola as an "intricate fraud built on dozens of lies." The report represented the culmination of extensive investigation involving interviews with whistleblowers, business partners, and former employees.

Key allegations in the Hindenburg report:

One key allegation concerned a January 2018 video that appeared to show the Nikola One truck driving under its own power. Hindenburg alleged—and prosecutors later proved—that the video was staged by rolling the non-functional prototype down a hill. The company's former chief engineer, Kevin Link, confirmed to investigators that the Nikola One was a non-functional prototype at the time of the video.

Milton's Resignation and Criminal Prosecution.

On September 21, 2020, Trevor Milton announced his resignation as Executive Chairman, with Stephen Girsky assuming the role of non-executive chairman.

Federal prosecutors pursued criminal charges, and in October 2022, Milton was found guilty of three of four counts of fraud—one count of securities fraud and two counts of wire fraud. Prosecutors presented evidence that Milton had made false claims that the Nikola One prototype was "fully functioning" when it was in fact inoperable. The jury's verdict followed the evidence presented at trial.

In December 2023, Milton was sentenced to four years in prison and ordered to pay $168 million in restitution along with a $1 million fine. The court also ordered forfeiture of his 4,678-acre ranch in Morgan County. Milton remained free pending appeal of his conviction.

SEC Enforcement and Corporate Settlement.

Parallel to the criminal prosecution, the SEC pursued civil enforcement against both Milton and the company. In December 2021, Nikola agreed to pay $125 million to settle SEC charges that the company violated antifraud and disclosure control provisions of federal securities laws.

SEC findings included:

• Milton misled investors about technological milestones and production capabilities
• False statements about hydrogen production costs and capacity
• Misrepresentations regarding truck reservations and customer commitments
• Inaccurate claims about the status of hydrogen fueling stations

The $125 million penalty was to be paid in five installments over a two-year period, with funds returned to victim investors through a Fair Fund.

The Presidential Pardon.

President Trump pardoned Trevor Milton on March 27, 2025—approximately five weeks after Nikola filed for bankruptcy. Milton announced the pardon via a post on X, stating he had received a phone call from President Trump informing him of the decision.

Milton's legal representation in pursuing the pardon included attorneys Marc Mukasey and Brad Bondi, the brother of Attorney General Pam Bondi. Public filings indicated Milton and his wife had donated more than $1.8 million to Trump's reelection campaign prior to the 2024 election.

The pardon's timing—after the bankruptcy filing but before the sale process concluded—enabled Milton to file claims against the estate through his entity ISSO, LLC, leading to post-confirmation disputes.

The Path to Chapter 11

Nikola's chapter 11 filing came after efforts to find a buyer or secure additional capital proved unsuccessful, as detailed in court filings.

Failed Pre-Petition Marketing Efforts.

According to the First Day Declaration, more than 20 parties were contacted about acquiring Nikola as a going concern before the company filed for bankruptcy. Two international automotive manufacturers expressed interest in a possible transaction but ultimately declined to proceed.

The company also approached up to 24 financial investors about providing capital to fund continued operations in the final months of 2024. The feedback was consistent: the investment required was too substantial given the long and uncertain path to profitability. Nikola's inability to demonstrate a commercial trajectory—combined with the reputational damage from the fraud scandal—limited capital formation options.

Declining Cash Position and Production Challenges.

The company's financial position weakened throughout 2024. On its third-quarter conference call, Nikola warned investors that it only had enough cash to fund operations into the first quarter of 2025. The company reported approximately $198 million in cash at the end of Q3 2024, but the cash burn rate made additional capital essential for continued operations.

Production volumes remained low. Since beginning commercial production in 2022, Nikola had manufactured only approximately 600 vehicles. For a company that had announced 7,000 pre-orders representing $2.3 billion in potential sales, the production level highlighted the gap between pre-order announcements and production output.

Product Recalls.

Two recalls occurred in the final months before and during bankruptcy.

Battery-Electric Truck Recall (2023). In June 2023, a Nikola truck caught fire at the company's headquarters due to a coolant leak inside the battery pack. When a second truck's battery pack malfunctioned in August 2023, Nikola announced a recall of all 209 battery-electric semitrucks manufactured to that point. The Phoenix Fire Department investigation found no evidence of arson, determining that the coolant leak was the probable cause. Following the recall, 111 trucks were repaired while 98 remained outstanding. Nikola switched battery suppliers and adopted a completely new battery design.

Hydrogen Fuel Cell Recall (2025). During the bankruptcy proceedings, Nikola recalled 95 hydrogen fuel-cell semi trucks due to potentially incorrect bolts on tank mounting blocks. The affected 2024-2025 Nikola Tre models had bolts that may have been too long, potentially contacting hydrogen tanks and causing leaks. While Nikola stated it had no awareness of any leaks, injuries, or property damage related to the issue, the recall required dealers to replace bolts and any damaged hydrogen tanks free of charge.

363 Sale Process and Liquidation

Nikola pursued a section 363 sale of substantially all assets, ultimately selling to multiple buyers before confirming a liquidating plan.

Sale Motion and Bidding Procedures.

On the petition date, Nikola filed a Sale Motion to pursue an auction and sale process under section 363 of the Bankruptcy Code. The company announced it had approximately $47 million in cash to fund bankruptcy activities and the sale process. Subject to court approval, Nikola intended to continue certain limited service operations and HYLA fueling operations through the end of March 2025 while conducting the marketing and auction process.

The court entered the Bidding Procedures Order in March 2025, establishing a framework for qualified parties to submit binding offers. Substantial due diligence materials were made available to interested parties, and the bidding procedures provided for assets to be purchased free and clear of indebtedness and certain liabilities. The debtors sought stalking horse bidders to establish bid floors for various asset packages.

Asset Sales Completed.

The 363 process resulted in multiple asset sales to different buyers rather than a single enterprise sale.

Lucid USA II, Inc. emerged as the primary acquirer of Nikola's core manufacturing assets, securing equipment and facilities from the Phoenix operations. Lucid is a publicly traded electric vehicle manufacturer.

Wabash Valley Resources Holdings LLC acquired specific assets through two de minimis sale transactions totaling $1.125 million. These sales were approved through streamlined procedures for smaller transactions.

Hyroad Energy, operating as H2LT Japan, acquired hydrogen-related assets for approximately $15.3 million.

Gordon Brothers Auction.

Beyond the negotiated sales to strategic buyers, Gordon Brothers offered over 100 Nikola trucks for sale through an auction process. The sale included hydrogen business machinery and inventory products, encompassing Class 8 hydrogen fuel cell and battery-electric trucks. This asset disposition represented the final wind-down of Nikola's physical vehicle inventory.

ISSO, LLC Claims and Post-Pardon Disputes

Trevor Milton's presidential pardon enabled him to pursue claims against the bankruptcy estate through his entity ISSO, LLC, leading to post-confirmation litigation.

ISSO, LLC Objections.

On December 9, 2025—just three days before the effective date—ISSO, LLC filed an objection to an Asset Purchase Agreement amendment and a declaration from Milton supporting the claims. The filings alleged multiple deficiencies in how the debtors conducted the 363 sale process.

ISSO, LLC alleged:

• Defective notice procedures for asset sales
• Grossly inadequate sale prices obtained through the 363 process
• ISSO had made competing purchase offers for Nikola assets that were not properly considered

The debtors contested ISSO's claims, arguing the sales were conducted properly under the Bidding Procedures Order and that all procedures required by the court's orders had been followed.

The timing of the ISSO objections, filed after the plan was confirmed but days before the effective date, created post-emergence disputes over the sale process.

Debtor Entities and Corporate Structure

The jointly administered cases encompassed the following debtor entities, reflecting Nikola's corporate structure and various operating subsidiaries.

Professional Retentions

The debtors assembled a professional team to execute the 363 sale process and liquidating plan.

Stephen J. Girsky, who assumed the role of non-executive chairman following Milton's September 2020 resignation, served as the First Day Declarant and provided the primary declaration in support of first day relief. Girsky, a former General Motors vice chairman, led the company's restructuring efforts through the bankruptcy process.

M3 Advisory Partners filed monthly fee applications throughout the case, with the ninth monthly application filed in December 2025, reflecting the sustained engagement required to manage the 363 sale process and plan confirmation.

Industry Context: SPAC Cycle and Hydrogen Market

Nikola's bankruptcy occurred amid broader market dynamics affecting both the SPAC vehicle structure and the hydrogen commercial vehicle sector.

The SPAC Boom and Its Consequences.

Nikola's 2020 SPAC merger with VectoIQ became a template for other electric vehicle startups seeking public market access.

Lordstown Motors, which went public through a SPAC merger in 2020 with significant Milton involvement, filed for chapter 11 in 2023 following its own fraud allegations. Fisker, Arrival, and Canoo—all EV startups that accessed public markets through SPACs—faced similar financial distress.

The SPAC-to-bankruptcy pipeline represents a category of cases characterized by:

• Pre-revenue or early-revenue companies with speculative valuations
• Limited operating history prior to public listing
• High cash burn rates and capital-intensive business models
• Significant shareholder losses as public equity is wiped out
• Clean-up of pre-bankruptcy promotional claims and projections

The Hydrogen Commercial Vehicle Market.

According to industry research, the hydrogen fuel cell commercial vehicle market was valued at approximately $1.41 billion in 2025 and is projected to reach $5.03 billion by 2030, representing a compound annual growth rate of 28.96%. Trucks are forecast to outpace buses in adoption, with a 31.10% CAGR from 2025 to 2030.

Hydrogen costs $8-12 per kilogram, translating to per-mile operating expenses roughly double those of battery-electric vehicles. Fuel cell systems require at least 25,000 operating hours for heavy-duty applications to meet commercial viability standards.

Nikola's planned HYLA hydrogen fueling network represented the critical infrastructure necessary to support fuel cell truck adoption. The company had opened its first semi-truck hydrogen refueling station in Ontario, California, in 2024 and announced plans for up to 60 stations over several years. A 10-year partnership with FirstElement Fuel was intended to expand refueling access. These infrastructure investments were abandoned as part of the bankruptcy wind-down, with hydrogen-related assets sold to Hyroad Energy.

Competitive Dynamics.

Traditional truck manufacturers entered the zero-emission commercial vehicle market with established dealer networks, manufacturing scale, balance sheets, and customer relationships. Daimler, Volvo, and PACCAR were among the incumbents expanding in the segment.

Nikola's approximately 600 vehicles produced since 2022 contrasted with the manufacturing capabilities of established OEMs.

Key Timeline

Frequently Asked Questions

When did Nikola file for bankruptcy?

Nikola Corporation filed for chapter 11 bankruptcy on February 19, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The case was assigned to Judge Thomas M. Horan and encompassed nine debtor entities that were jointly administered under case number 25-10258.

What was Nikola's peak valuation?

In June 2020, shortly after completing its SPAC merger with VectoIQ, Nikola's market capitalization reached nearly $30 billion—briefly surpassing Ford Motor Company. The SPAC merger had implied an enterprise value of approximately $3.3 billion, meaning the post-merger trading value represented a nearly 10x increase within weeks of the public listing.

What happened to founder Trevor Milton?

Trevor Milton resigned as Executive Chairman in September 2020 following the Hindenburg Research fraud allegations. In October 2022, he was convicted of one count of securities fraud and two counts of wire fraud. He was sentenced to four years in prison in December 2023 and ordered to pay $168 million in restitution. President Trump pardoned Milton in late March 2025, approximately five weeks after Nikola filed for bankruptcy.

What did the Hindenburg Research report allege?

The September 2020 report labeled Nikola an "intricate fraud built on dozens of lies." The most damaging allegation was that a 2018 promotional video showing the Nikola One truck appearing to drive was staged by rolling the non-functional prototype down a hill. The report also alleged misrepresentations about battery technology, hydrogen production capabilities, and truck pre-orders.

Who bought Nikola's assets in bankruptcy?

Multiple buyers acquired assets through the 363 sale process. Lucid USA II, Inc. was the primary buyer of manufacturing equipment and facilities. Wabash Valley Resources Holdings LLC acquired specific assets for $1.125 million in two transactions. Hyroad Energy (H2LT Japan) purchased hydrogen-related assets for approximately $15.3 million. Gordon Brothers conducted an auction of over 100 Nikola trucks and related inventory.

How many trucks did Nikola actually produce?

Nikola manufactured only approximately 600 vehicles from the time it began commercial production in 2022 through its bankruptcy filing. This contrasted with the 7,000 pre-orders announced following the 2016 Nikola One unveiling, which purportedly represented over $2.3 billion in potential sales.

What was the HYLA network?

HYLA was Nikola's planned hydrogen fueling infrastructure network, intended to support customers operating hydrogen fuel cell trucks. The company opened its first station in Ontario, California, and planned up to 60 stations over several years. The network never materialized beyond initial stations in Southern California, and hydrogen-related assets were sold to Hyroad Energy during the bankruptcy.

What is ISSO, LLC and why did it object to the sales?

ISSO, LLC is an entity through which Trevor Milton filed claims against the Nikola bankruptcy estate following his presidential pardon. On December 9, 2025, ISSO filed objections alleging defective notice procedures, inadequate sale prices, and that ISSO's competing purchase offers were not properly considered. The debtors contested these claims, arguing sales were conducted properly under court-approved procedures.

Who is the claims agent for Nikola Corporation?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent for the Nikola Corporation bankruptcy (Case No. 25-10258, jointly administered). The case is pending in the U.S. Bankruptcy Court for the District of Delaware before Judge Thomas M. Horan. Creditors and parties in interest can access case documents and file proofs of claim through Epiq's case administration portal.

What is the current status of Nikola's bankruptcy case?

Nikola Corporation confirmed a Chapter 11 Plan of Liquidation on September 12, 2025, and the plan's effective date occurred on December 12, 2025—approximately 296 days after the February 19, 2025, petition date. The company did not reorganize or emerge as a going concern. Instead, substantially all assets were sold through 363 sales—with Lucid USA II acquiring manufacturing equipment and facilities—and a Liquidating Trust was established to wind down the estate, process remaining claims, and make distributions to creditors. Thomas A. Pitta serves as the Liquidating Trustee.

What happened to the SEC settlement?

Nikola agreed to pay $125 million to settle SEC fraud charges in December 2021, with funds to be returned to defrauded investors through a Fair Fund. The settlement was to be paid in five installments over two years. The company was in bankruptcy before completing all payments, potentially affecting ultimate distributions to the SEC Fair Fund.

What does Nikola's failure mean for the hydrogen truck industry?

The hydrogen fuel cell commercial vehicle market is projected to grow from $1.4 billion in 2025 to $5 billion by 2030. Nikola pursued vehicle development and hydrogen infrastructure buildout while competing against established manufacturers.

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