Tesla Counters Ex-Employee's Bankruptcy Bid In $425K Legal Battle Over Elon Musk Feud

Tesla Inc (NASDAQ:TSLA) is fighting a former employee’s attempt to use bankruptcy as a shield against a $425,000 legal debt originating from a longstanding feud with CEO Elon Musk.

What Happened: Tesla appealed to a bankruptcy judge on Tuesday to hold ex-employee Martin Tripp responsible for his debt. Tripp had previously conceded his breach of trade secret laws and confidentiality agreements, reported Bloomberg.

The court filing is the newest twist in a quarrel that started in 2018. Tripp had anonymously tipped off the media about Tesla’s excessive wastage of raw materials at its Nevada Gigafactory, which led to his dismissal and ensuing legal skirmishes with the company.

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In 2020, Tripp agreed to pay $400,000 to settle a lawsuit by Tesla claiming he had leaked confidential data. In addition, he was ordered to pay the company $25,000 in sanctions for posting court documents online, defying a judge’s order.

Tripp had been making payments towards the debt until late September, when he declared bankruptcy, according to Tuesday’s filing.

Why It Matters: The clash between Tesla and Tripp started over allegations of trade secret breaches and leaking confidential information about Model 3 production delays. Tripp, a former employee at Tesla’s Nevada factory, was dismissed after being identified as the source of the leaks. The ensuing lawsuit saw Tripp agreeing to pay $400,000 to Tesla as part of the settlement.

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