Nikola Corp. filed for bankruptcy a few months after they said it will run out of cash early this year. The company was once a rising star on Wall Street but was caught in a scandal of misleading consumers for exaggerated claims of their zero-emission 18-wheel trucks in 2022.

Trevor Milton, the founder of Nikola Corp. was sentenced to four years in prison in 2023 after being convicted of his exaggerated claims.

According to AP news “Prosecutors said Milton falsely claimed to have built its own revolutionary truck that was actually a General Moters Corp. product with Nikola’s logo stamped onto it” (Chapman, Feb 19)

Nikola Corp. filed for bankruptcy protection and said Wednesday that they have filed a motion to seek an auction and selling of the business.

Nikola has announced that they will continue limited services for vehicles in the road through the end of march, subject to a courts approval, The company said it will need to raise more funds to support those activities afterwards.

The executive said that they have made efforts to raise funds and reduce liability in recent months but that it hasn’t been enough. He explained that chapter 11 represents the best path forward for the company as well as the investors.