Will Bad Bromance Kill Hyperloop?

July 13, 2016
Hyperloop Technologies plans to start commercial operations by 2020, but a nasty legal battle between co-founders could flush the promising company down the tubes.

This past May in the sunny Nevada desert, Hyperloop One took a small step forward by publicly testing an electric motor on a half-mile track. The moment lasted five seconds and got everyone buzzing about the vacuum tube transportation technology that Elon Musk theorizes could whisk passengers from Los Angeles to San Fransisco in 30 minutes.

Two months later, the company, and possibly the technology, have catapulted backwards with the resignation of co-founder and chief technology officer, Brogan BamBrogan. The mustachioed former SpaceX engineer, along with three now former employees, Dr. Knut Sauer, David Pendergast, and William Mulholland, are suing Hyperloop One for a litany of grievances that have turned an exciting, engineering-driven workplace into a toxic oasis that serves only to fuel venture capitalists' narcissistic supply.

NORTH LAS VEGAS, NV - MAY 11: (L-R) Hyperloop One Co-Founder & Executive Chairman Shervin Pishevar, Hyperloop One Chief Executive Officer Rob Lloyd and Co-Founder & Chief Technology Officer Brogan BamBrogan speak during the first test of the propulsion system at the Hyperloop One Test and Safety site on May 11, 2016 in North Las Vegas, Nevada. The company plans to create a fully operational hyperloop system by 2020. (Photo by David Becker/Getty Images,)

"...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 (and those of their family members)," the document claims. "Those with the expertise to bring the hyperloop concept to fruition — the team that has done an incredible job  building out hardware with their heads down and hands in the dirt
 — have been systematically marginalized, while the 'money men' who do not understand the technology spent little time seeking to understand its potential, focusing instead on puffery —  turning the company into a marketing-driven exercise, instead of the engineering-driven enterprise it should be."

Read the entire salacious legal document at TechCrunch.

The details mostly center around co-founder and board chair Shervin Pishevar. The venture capitalist and his firm, Sherpa Capital, were critical in raising $92 million to commercialize the technology, but the court documents allege Pishevar misappropriated funds by paying his girlfriend, a PR vendor, $40,000 a month, more than anyone else in the company.

"When their subsequent wedding engagement fell through, he finally heeded suggestions that her work was worth little, and terminated the arrangement," the court document says.

The lawsuit also claims nepotism from Pishevar, who hired his brother Afshin Pishevaras -- a personal injury and criminal defense attorney -- as general counsel, "granting him salary and stock options far greater than even the most talented engineers received."

Afshin is also accused of harassment and inflicting emotional distress for placing a hangman's noose on BamBrogan's chair after he and other employees named as plaintiffs in the lawsuit voiced their concerns about the improprieties at the top.

Security footage seems to indicate Afshin Pishevar, general counsel for Hyperloop One, left a noose on CTO and co-founder Brogan BamBrogan's desk. It was either a threat or poorly executed request to play Hangman.
Screengrabs: Los Angeles County Superior Court
BamBrogan's desk

Fellow venture capitalist Joe Lonsdale, who together with Pishevar, own 78% of the company voting rights, was also named in the suit, and similarly accused of nepotism -- for hiring his "little brother's two-person outfit" as the company's exclusive investment bank.

Lonsdale was also accused of defaming BamBrogan via a threatening email when the infighting hit critical mass in June. In it, BamBrogan was accused of going haywire and sabotaging a business deal with the Russians.

This isn't the first lawsuit against Lonsdale, who was accused in February 2015 of raping Stanford grad and model Elise Clougherty tens times  a day. The suit against the Silicon Valley millionaire, who is just oozing with Patrick Bateman-esque charm, was miraculously dropped last November.

Venture capitalist Joe Lonsdale is accused nepotism and defamation by a lawsuit from former Hyperloop One CTO Brogan BamBrogan. Last year he was accused of rape and assault by a former girlfriend, but that suit was dropped.

Hyperloop One released a rebuttal statement yesterday afternoon:

Today's lawsuit brought by former employees of Hyperloop One is unfortunate and delusional. These employees tried to stage a coup and failed. They knew that the company was aware of their actions, and today's lawsuit is their preemptive strike. The claims are pure nonsense and will be met with a swift and potent legal response. Frivolous lawsuits like this one have become all too common against start-ups that achieve breakthrough success. The lawsuit filed today by these disgruntled ex-employees is almost a cliche. It is also a measure of Hyperloop's success. The company continues to recruit top talent, secure significant funding from global investors and accelerate toward its technology milestones. 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.

The courts will decide who is right and wrong, but the fact remains that BamBrogan was THE driving force behind Hyperloop One's engineering department. He took his former employer Elon Musk's idea and ran with it.

And even if every claim made by the plaintiffs -- which include dysfunctional practices such as CEO Rob Lloyd firing of Pendergast in front of his wife and children and making engineers stop work to give a nightclub bouncer a tour -- are exaggerated or false, the perception now exists that the "money men" behind Hyperloop One are spoiled sociopaths who care more about their egos than creating something that could transform and define the 21st century.

Hyperloop One is now the Johnny Manziel of Silicon Valley.

Fortunately for the world, to paraphrase Yoda, "There ... is ...another ... Hyperloop."

Image: Hyperloop Transportation Technologies

Called Hyperloop Transportation Technologies, it plans to construct city-based Hyperloop in central California, but most likely without death threats or rape allegations. It's the best new hope for revolutionary high-speed transportation.

And a great place for investors to turn if this lawsuit proves fatal to the company.

After the motor test, Lloyd claimed  the hyperloop was "going to happen much quicker than anyone imagines."

Two months from now, the same may be said about the company's implosion.