DeLorean Motors ReImagined LLC, the firm behind the new electric Delorean Alpha 5 is being sued by Karma Automotive LLC

In a federal lawsuit filed Monday in Texas, an electric car manufacturer accused four former employees of stealing its trade secrets and starting a rival company to run off with a project that involves updating the famous DeLorean.

A lawsuit filed in the Southern District of Texas by Karma Automotive LLC claims that its former vice president of sales and customer experience and chief revenue officer formed their own company, Reimagined Automotive LLC, with the intent of stealing a joint venture project with DeLorean Motor Co.

According to the lawsuit, the former employees were tasked with developing and proposing ideas for the joint venture, called Project 88, which was led by ex-Vice President Joost de Vries, ex-Chief Revenue Officer Alan Yuan, Troy Beetz, and Neilo Harris. In December 2020, the men allegedly grew tired of answering to Karma Automotive executives.

“Apparently, individual defendants grew dissatisfied with Karma’s efforts to make Project 88 more detailed and viable, and instead decided to prevent Karma from being able to move forward with Project 88 so that they could seize the business opportunity for themselves” Karma Automotive said.

While still employed by Karma Automotive, the four men allegedly solicited investments and pitched their new company from December 2020 until February 2022. They allegedly discussed the new business using Karma Automotive company email addresses and used company cars for in-person meetings.

They were also alleged to have withheld information from executives of Karma Automotive to persuade them that Project 88 would not succeed. Reimagined Automotive was founded in February 2021 after that approach did not work.

The four men founded DeLorean Motors Reimagined LLC in November 2021 after De Vries resigned from Karma Automotive. But Yuan, Beetz and Harris would remain employed by Karma Automotive until February 2022.

At the end of their employment, each man signed an agreement claiming he didn’t possess any proprietary or trade secrets of Karma Automotive. Karma Automotive, however, said PowerPoint presentations and other communications created by the men tell a different story.

“Karma’s trade secrets, in the hands of a competitor, would show the competitor what not to do, based on proposals or ideas that Karma determined were not feasible,” the company said. “A competitor with access to Karma’s trade secrets could avoid the costly trial-and-error process inherent in any engineering project, further saving time and costs.”

Reimagined Automotive and the joint venture of DeLorean Motors Reimagined are being sued for breach of contract, breach of fiduciary duty, fraud, and tortious interference. Additionally, Karma Automotive claims that federal and state laws were violated by the misappropriation of trade secrets.

According to the lawsuit, Karma Automotive also requested injunction relief along with damages.

The case is Karma Automotive LLC v. de Vries et al., case number 4:22-cv-02644, in the U.S. District Court for the Southern District of Texas.

Delorean Motor’s Reimagined first electric car, the Delorean Alpha 5 is due to premiere at Pebble Beach Concours d ‘Elegance Award ramp on August 18 and the Concept Lawn on August 21.

Here’s hoping the new Delorean doesn’t have the same fate as the original.