Karma Automotive dropped its $900 million lawsuit over intellectual property rights against Lordstown Motors Corp (OTC:RIDEQ), but only on the condition that it receives a $40M settlement.
The suit was filed in California in October 2020, alleging that Lordstown violated the U.S. Computer Fraud and Abuse Act, misappropriated trade secrets and breached confidentiality agreements, among other charges.
Karma claimed that Lordstown wrongfully misappropriated their trade secrets and ideas, causing a halt to the company's sale, as Karma asserted partial ownership. Some ex-Lordstown employees were among those accused.
The case has been dismissed with prejudice. According to the court order, Lordstown, along with various named and unnamed individuals, must make a sincere attempt by October 12 to either return or verify the destruction of all physical and digital documents and information related to Karma that were disclosed during the discovery process.
The companies reached a $40M settlement agreement back in August, pending court approval. Now that it's been given the green light and both parties have agreed it's final, there's no room for appeal. As part of this settlement, the lawsuit was dismissed with prejudice.