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Hyperloop One Settles Suit Alleging Mismanagement and Infighting

Hyperloop One co-founder and Executive Chairman Shervin Pishevar, left; CEO Rob Lloyd, center; and co-founder and former CTO Brogan BamBrogan, right.John Gurzinski — AFP/Getty Images

Hyperloop One, a startup that is trying to develop a futuristic transportation system that would propel passengers at hundreds of miles an hour in small pods, has reached a settlement with its departed co-founder and three other employees who sued it for breach of contract and other alleged wrongdoing.

The settlement, announced Friday, ends a high-profile legal tussle that aired a series of salacious accusations against the company and revealed intense in-fighting. The plaintiffs, led by co-founder and former chief technology officer Brogan BamBrogran, accused Hyperloop One’s executives of mismanaging funds— by allegedly giving a big raise to a romantic interest, in one case—breaching their fiduciary duties, and emotional distress.

The defendants named in the suit include co-founder Shervin Pishevar, his brother, Afshin, and CEO Rob Lloyd.

Included in the suit is a claim by BamBrogan that Afshin left a noose on his chair in an effort to intimidate after he had complained to investors about mismanagement at the company. Hyperloop One responded that it was a harmless lasso, but that Afshin had nevertheless left the company.

Hyperloop One had denied all of BamBrogan’s accusations. In a letter to employees, Lloyd explained the settlement by saying: “Lawsuits can be distracting for companies; they often halt momentum until they can be resolved. That didn’t happen here.”

Terms of the settlement were not disclosed.

Despite the settlement, the drama may not be entirely over. BamBrogan released a statement on Friday suggesting that he has a new company that plans to create it own hyperloop, an idea first floated by Tesla and SpaceX CEO Elon Musk in 2013.

“We are planning to build rad shit with rad people, starting with our take on hyperloop,” BamBrogan said along with three other executives who had joined the suit against their former employer. “More to come in the near future.”

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Just months before BamBrogan filed the lawsuit, Hyperloop One held its first open-air test of its propulsion system in North Las Vegas, Nev. At the event, the company announced a number of new global partnerships.

In spite of its legal problems, the startup has continued to sign up more partners, including one this month with McKinsey & Co., and architectural firm Bjarke Ingels Group, to study the feasibility of a hyperloop between Dubai to Abu Dhabi. Dubai’s transportation authority is sponsoring the study.