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Ilya St
in
Legal
October 10 01:56

LA-based startup co-founder faces lawsuit for alleged discrimination

Canoo and its co-founder Stefan Krause face litigation for harassment, breach of contract, wrongful termination and marital discrimination in a pending lawsuit.
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 The lawsuit was filed on Tuesday by Canoo’s former head of communications and Krause’s wife, Christina Krause. Canoo, a California-based electric car startup, recently wrapped up their electric vehicle designs, just a few weeks before the filing.
Although a Canoo spokesperson said in a statement that the company will not comment on pending litigation, the lawsuit itself, which was filed in the LA Superior Court, contains several serious allegations against Stefan Krause and the company. Among other things, Canoo allegedly denied Christina Krause the title of co-founder, and everything else that usually comes with it, despite the fact that she was a founding employee. The lawsuit also alleges that Krause was paid less than the other founding members. 
The main focus of the lawsuit is Stefan Krause himself, who filed for divorce from Christina Krause in July of this year. Following the divorce, Stefan Krause stepped down as CEO of the company for personal reasons. He currently remains at the company as chairman of the Advisory Board with his primary function aimed at fundraising. The day-to-day operations and functions of CEO were taken over by Ulrich Kranz, who was originally the company’s Chief Technology Officer. 
The lawsuit also helped  unveil some interesting details Canoo’s origin, its investors and its rather rapid growth. The company, originally named Evelozcity, was founded towards the end of 2017, after a meeting with would-be investors in Hong Kong. Canoo hasn’t revealed the names of its primary investors, but the lawsuit revealed them to be David Stern, a German businessman and friend of Stefan Krause and Pak Tam “David” Li. Stern is also listed as a consultant for Celestial Limited and as the director of Pitch@Palace, a UK incubator.
The Hong Kong meeting took place not too long after Stefan Krause left his position at the struggling company Faraday Future. At its conclusion Li, Stern and Stefan Krause were said to have made an unofficial agreement to start an EV company with Christina Krause being responsible for HR and other administrative tasks necessary for forming the company. 
A month later, the company was launched with 10 founding employees, 9 of which were given the title of co-founder with Christina Krause alleging that she was the only one exception. The lawsuit goes on to say that she was excluded being given the co-founder status because her role “wasn’t critical for the building of the car” and that it was “distasteful” for the wife of a co-founder to be given an equal stake and designation as that of her husband.
After only four months since its launch, the Canoo had over one hundred employees. In a few short months, that number doubled to 200 in September of 2018 and then tripled in March of the following year. The number of employees now reaches over 400, as stipulated in the lawsuit. As the startup grew, Christina and Stefan Krause’s relationship dwindled. March of 2019 marked a turning point when David Stern, Ulrich Kranz, and Stefan Krause pushed Christina Krause to sign a postnuptial agreement, which would likely govern how the company’s shares would be divided in the event of the couple’s divorce.
With the engineering and design complete, Canoo is currently getting ready to produce its cars through an unknown Michigan-based manufacturer, with the first cars scheduled to be released to the public in 2021.