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Hyperloop One fights back against BamBrogan lawsuit in counter-complaint

Hyperloop One Co-Founder & former Chief Technology Officer Brogan BamBrogan speaks during the first test of the propulsion system at the Hyperloop One Test and Safety site on May 11, 2016 in Las Vegas, Nevada.
John Gurzinski | AFP | Getty Images
Hyperloop One Co-Founder & former Chief Technology Officer Brogan BamBrogan speaks during the first test of the propulsion system at the Hyperloop One Test and Safety site on May 11, 2016 in Las Vegas, Nevada.

Start-up Hyperloop One has formally fired back at complaints of mismanagement by accusing a former employee of filing a "sham" lawsuit to cover up a coup to take over the company.

It's the latest chapter in the dramatic fight between co-founders Brogan BamBrogan and Shervin Pishevar.

BamBrogan, joined by former employees Knut Sauer, David Pendergast and William Mulholland, filed a lawsuit against Hyperloop One earlier this year, claiming it "is being strangled by the mismanagement and greed of the venture capitalists who control the company."

But the company responded Wednesday with an amended counter-complaint stating that BamBrogan and his "gang" were "actively purchasing domain names, plotting to steal [Hyperloop One's] investors and intellectual property, plotting to work around the company's patent applications, and a scheme to engage in frivolous litigation to further harm the company."

The new amendments to the filing also include accusations of breach of contract. Some highlights of the allegations against BamBrogan and the other claimants include:

  • That BamBrogan and other defectors created a fake Twitter account to retweet disparaging comments about Hyperloop One.
  • That the former employees knew their days were numbered, because they were "sloppy," "below average," and engaged in "performance lapses, abusive behavior ... and egregious insubordination."
  • The "gang" tried to poach Hyperloop One employees to start a competing venture, and illegally took company equipment when they left the company.
  • They insisted on having family and children present at heated negotiations about their "despicable conduct."

Justin Berger, attorney for Brogan BamBrogan, called the new filling a "thinly veiled publicity stunt."

"If these employees had wanted to form their own company, they simply would have left, rather than engaging in weeks of protracted negotiations in an attempt to put Hyperloop One back on track," Berger said.

Here's the full complaint:

This story is developing - check back for updates.

Correction: This story was revised to correct the spelling of Brogan BamBrogan's first name.

— Reporting by CNBC's Ari Levy.