EV Maker Nikola Seeks to Lower Priority of SEC’s Fraud Claim

Electric-vehicle maker Nikola Corp. asked a bankruptcy court to lower the priority of an $80.2 million claim from the Securities and Exchange Commission seeking to create a fund to pay investors harmed by ex-CEO Trevor Milton’s fraud.

The claim violates bankruptcy law’s “absolute priority rule” because it seeks to distribute estate funds to equity holders through a “fair fund,” Nikola said in a July 25 filing in the US Bankruptcy Court for the District of Delaware.

The claim stems from a $125 million civil penalty imposed by the SEC, of which $45 million has already been paid. Nikola agreed to ...