Hyperloop One lawsuit exposes bitter rift between co-founders

Hyperloop One, formerly known as Hyperloop Technologies when it was conceived by Musk, BramBrogan, and Shervin Pishevar in 2014, is an ultra high-speed transportation concept that uses electric propulsion to accelerate people (or cargo) through a tube in a low pressure environment.

Such actions “highlight the defendants’ treatment of Hyperloop One as their personal plaything, rather than as a serious enterprise”, according to a copy of the complaint provided by the plaintiffs after they filed it Tuesday in state court in Los Angeles.

“Today’s lawsuit brought by former employees of Hyperloop One is unfortunate and delusional”, Orin Snyder, a lawyer for Hyperloop, said in an e-mailed statement.

Here’s where we say that Hyperloop One is calling the suit “bogus” and a “preemptive strike” by employees who attempted to stage a coup and got found out.

“The claims are pure nonsense and will be met with a swift and potent legal response”, Snyder said.

Before it’s here, it’s on the Bloomberg Terminal.

Brogan BamBrogan, along with three other former Hyperloop One executives, claim the company’s top leadership gave unfair jobs and raises to relatives and significant others, made inadvisable financial decisions to pocket more money themselves, and harassed other employees.

Defendant Joseph Lonsdale insisted that the company hire his little brother’s two-person outfit, with no notable experience with companies building hardware and engaged in infrastructure development, and few independent contacts with worldwide and top-tier investor funds, as the company’s exclusive investment bank, when far better partners were available.

A Literal Hangman’s Noose as a Threat ” Shervin’s brother and Chief Legal Officer of Hyperloop One, Defendant Afshin Pishevar, strolled through Hyperloop One’s office and placed a hangman’s noose on BamBrogan’s chair. The classic nepotism move “undoubtedly damaged Hyperloop One’s credibility and potentially lost out on tens of millions of dollars in investments, as well as the opportunity to garner investment from strategic and internationally respected sources”. (The suit included stills from surveillance footage that allegedly show Pishevar with a rope in his hand.) It also claims that when Shervin Pishevar began dating the company’s PR representative, he increased her salary from $US15,000 ($19,651) a month to $US40,000 ($52,403) a month. Pishevar has also now left Hyperloop One.

BamBrogan, who left the company in June, is the main plaintiff in the case.

“In mid-June Bambrogan requested a temporary restraining order against Hyperloop’s chief legal officer Afshin Pishevar, who also happens to be cofounder Shervin Pishevar’s brother”. It is nearly a cliche. The suit alleges that all 11 employees were subsequently threatened with “economic and legal warfare by millionaires with extensive networks”.

The co-founder of a high-profile transportation startup on July 12 filed a lawsuit against the company and several of its leaders, alleging infractions ranging from breaching their duty to shareholders to assault. (Shervin and Lonsdale together control roughly 78% of the company’s shareholder voting rights, according to the suit.) Shortly after sending that letter, BamBrogan says he called a pair of Russian investors to discuss its contents.

Other plantiffs include Knut Sauer, the company’s former president of business development; David Pendergrast, the former assistant general counsel; and William Mulholland, the former vice president of finance.