In re Nikola Corporation Derivative Litigation, No. 2022-0023-KSJM (Del. Ch.): On November 20, 2025, the Hon. Kathaleen St. Jude McCormick granted final approval of two settlements consisting of overlapping class action and derivative claims that Johnson Fistel achieved for Nikola Corporation (“Nikola” or the “Company”) and its stockholders as Court-appointed Co-Lead Counsel. One settlement resolves derivative claims brought by plaintiffs on behalf of Nikola and the other resolves direct class action claims brought on behalf of investors of VectoIQ Acquisition Corp. (“VectoIQ”), a special purpose acquisition company, in connection with a de-SPAC transaction with Nikola. The settlements resulted in a combined $33.75 million recovery to the Company with the derivative claims settling for $27.45 million and the class action claims settling for $6.3 million.
The derivative claims, brought on behalf of nominal defendant Nikola and against certain current and former directors and officers of the Company, alleged breaches of fiduciary duties and other violations of Delaware and federal law. Specifically, these directors and officers failed to prevent Nikola founder and former chairman and Chief Executive Officer, Trevor Milton (“Milton”), from misrepresenting to investors that Nikola had built an impressive business model with its own proprietary turbine, battery, hydrogen fuel cell, hydrogen production technologies, and zero-emissions trucks. The class action claims alleged that Milton deceived the market with his false statements in order to inflate the Company’s valuation prior to the de-SPAC transaction with VectoIQ.
The settlements reached by the parties, and approved by the Court, were the result of over four years of litigation, during which plaintiffs’ counsel devoted more than 9,000 hours of time, and involved the exchange of over two million pages of discovery, extensive mediation, and coordination with Nikola’s bankruptcy estate. Prior to mediation, Co-Lead Counsel defeated multiple motions to dismiss filed by the defendants. In a detailed ruling, Chancellor McCormick held that plaintiffs adequately alleged that certain directors and officers failed to properly oversee the Company and ensure accurate disclosures to investors, allowed claims based on a defendant’s alleged insider trading on non-public information to proceed, and found plaintiffs alleged viable claims on behalf of investors challenging aspects of the merger process itself.
In approving the settlements, Chancellor McCormick offered her “[c]ongratulations on what was a hard-fought set of litigations and an incredibly complicated settlement to achieve,” and “recognize[d] that the perils of bankruptcy added complications to these negotiations that perhaps rendered already complicated cases even more so.” Chancellor McCormick also highlighted that the Court was under unusual pressure to expedite the process because the settlement was integrated into Nikola’s Chapter 11 bankruptcy proceedings and therefore required swift approval. After hearing from counsel, Chancellor McCormick remarked that the settlement was “far more than fair” as she granted her approval.
Attorneys Frank J. Johnson, Brett M. Middleton, and Jonathan M. Scott led the prosecution of the litigation for Johnson Fistel and helped achieve this superb result on behalf of plaintiffs and Nikola.
