SEC Objects to Nikola Plan Lowering $80 Million Claim Priority

The Securities and Exchange Commission objected to Nikola Corp.’s bankruptcy liquidation plan, which aims to lower the priority of the agency’s $80 million claim to pay investors harmed by former CEO Trevor Milton’s fraud.

The civil penalty isn’t a “claim for damages” stemming from securities transactions but a regulatory enforcement action based on securities law violations, the SEC said in a Tuesday motion in the US Bankruptcy Court for the District of Delaware.

The electric vehicle maker asked the court last month to lower the claim’s priority, saying it violates the bankruptcy law’s “absolute priority rule” by distributing estate funds ...