Legal Drama Could Knock Hyperloop Off Track

Updated: 14 July 2016 16:27 IST

A Hyperloop One co-founder is suing the startup and accusing former colleagues of nepotism, threats and mismanagement, igniting a drama that could stall the company devoted to revolutionizing transport systems.

Brogan BamBrogan, who left the company in June,was among complainants in a civil suit filed in a California state court on Tuesday.

"It became apparent that those in control of the company continually used the work of the team to augment their personal brands, enhance their romantic lives, and line their pockets," the lawsuit said.

Orin Snyder, an attorney representing Hyperloop One, called the lawsuit an "unfortunate and delusional" effort by employees behind a failed coup at the startup.

He vowed a swift and strong legal response.

"Hyperloop is on track, its board and team are united and today's bogus lawsuit will have no impact on its goal of becoming the first company to bring the Hyperloop to the world," Snyder said in a statement.

The case comes two months after Hyperloop One held its first public test in the desert outside Las Vegas, trying out engine components designed to rocket pods carrying people or cargo through tubes at speeds of 700 miles per hour (1,125 kilometers) or more.

The company hopes to realize a futuristic vision for transportation at near-supersonic speeds laid out three years ago by billionaire Elon Musk, the entrepreneur behind electric car company Tesla and private space exploration endeavor SpaceX.

Backers for Hyperloop One include the French national rail company.

Nepotism
The lawsuit charged that "money men" at the company marginalized those with technical expertise, turning the startup into a marketing-driven enterprise.

BamBrogan accused fellow co-founder Shervin Pishevar and other leaders of creating an autocratic culture "rife with nepotism" and squandering the company's cash.

Pishevar, chief executive Robert Lloyd and board member Joseph Lonsdale were named as defendants.

BamBrogan contended that Pishevar nearly tripled a public relations employee's pay to $40,000 a month after getting romantically involved with her, then terminated the arrangement when wedding plans fell apart.

Pishevar's brother, Afshin, was hired as general counsel and given pay and stock options that were out of reach for top engineering talent, according to the suit.

Uncertainties
BamBrogan maintained in the suit that he was subjected to threats.

Afshin Pishevar left a hangman's noose on BamBrogan's desk after complaints that company resources were being misused, the suit said.

BamBrogan was told to take a leave of absence, another employee who complained was fired, and a third was demoted.

BamBrogan said he resigned in June out of fear for his safety.

The lawsuit accuses the company of wrongful termination, breach of contract, assault and more. Demands include an apology, unspecified damages and reinstatement to prior positions at the startup.

Shervin Pishevar and BamBrogan founded Hyperloop One, originally named Hyperloop Technologies, in 2013.

During the component test in the Nevada desert, BamBrogan promised a "full-scaled, full-speed" demo by the end of the year.

Hyperloop One was so confident in the speed at which the project was moving that it announced a global challenge in which businesses, governments, citizens, academics and others could submit proposals for where the systems should be built.

BamBrogan's lawsuit could be an obstacle for that ambitious timeline, spooking investors and partners.

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