EquipmentShare Lawsuit: Boardroom Fight, Fraud Probe, Patent Suit

EquipmentShare.com Inc., the Missouri-based construction equipment rental company that listed on the Nasdaq in January 2026, is tangled in several active legal disputes. The most prominent EquipmentShare lawsuit is a boardroom fight with former director and early investor Neil Chheda, who accuses the founders of fraud and self-dealing; the company has countered with fraud allegations of its own. A separate securities fraud investigation was opened after the IPO, and older patent, trade-secret, and employment cases remain on the docket.

The Chheda Boardroom Fight

Neil Chheda co-founded Romulus Capital, whose affiliated funds hold a 23% stake in EquipmentShare. What started as an internal governance dispute has become dueling lawsuits with fraud claims on both sides.¹

What Chheda Alleges

Chheda and Romulus filed suit in the Business Court of Texas on October 16, 2025. According to the complaint, Chheda began raising concerns in 2024 about self-interested transactions by the Schlacks family, including secondary stock transfers to the founders, “sweetheart contracts” with entities affiliated with the Schlackses, preferential treatment of family members, and undisclosed personal loans to the founders.²

The conflict unfolded in stages:

2024: Chheda filed a books-and-records request in Delaware Chancery Court. The board formed a special committee to investigate him, then used its findings to remove him.
January 2025: After Chheda challenged the removal in Delaware, the company reinstated him.
June 2025: The board voted to reincorporate EquipmentShare in Texas. Chheda alleged the move was designed to strip Romulus of protections available under Delaware law.
September 30, 2025: The board removed Chheda a second time.
October 16, 2025: Chheda and Romulus sued in Texas, alleging the removal violated a voting agreement guaranteeing Romulus a board seat and was retaliation for his fraud investigations.²

Chheda framed the dispute as an effort by the founders to eliminate oversight before the then-planned IPO.²

What EquipmentShare Alleges Back

EquipmentShare has pushed back hard. In a filing opposing Chheda’s return to the board, the company called his tenure “tainted by misconduct” and described his legal effort as a “self-interested vendetta.”³⁴

A separate suit by Republic Maximal against Romulus Capital and Chheda in the U.S. District Court for the District of Massachusetts (Case No. 1:22-cv-10429) alleges that Chheda committed fraud, forged signatures, and fabricated a fake persona named “Sarah Williams,” including an email address at Romulus’s domain, to conduct deceptive communications. That case remained pending in late 2025, with plaintiffs requesting sanctions for alleged “fraud on the court.”⁵

The November 2025 Ruling

When the fraud allegations became public, EquipmentShare’s bonds dropped sharply on October 24, 2025, as creditors reacted to governance concerns at a company that had borrowed heavily in the private bond market.⁶

The parties agreed to a standstill pending a temporary injunction hearing on November 5, 2025.² On November 6, 2025, the court rejected Chheda’s request for a temporary injunction to reinstate him. A company spokesperson called the ruling a step in “dismantling Mr. Chheda’s baseless litigation campaign.”⁷ Chheda and Romulus retain the right to appeal, though reporting indicated any appeal was unlikely to be resolved before the IPO.⁵ The underlying Texas lawsuit remains active.

The Post-IPO Securities Fraud Investigation

Two months after EquipmentShare’s January 23, 2026 IPO, a second legal front opened. On March 18, 2026, the company reported financial results showing the scale of costs tied to its OWN Program and expansion activities and their effect on margins. It filed its Form 10-K for fiscal year 2025 the next day. Between March 18 and March 20, the stock fell from $24.54 to $21.80, a decline of roughly 11.2%.⁸

The OWN Program is a capital-light arrangement in which third-party investors purchase rental equipment and lease it back to EquipmentShare. As of September 2025, OWN Program equipment represented $4.2 billion in original equipment cost, roughly 52% of the company’s rental fleet. Payouts to OWN Program participants grew from $95.8 million in 2022 to $420.1 million in 2024, and reached $512.3 million in just the first nine months of 2025.⁹

Law firm Kirby McInerney LLP announced an investigation into whether EquipmentShare and its senior management violated federal securities laws, focusing on whether the company adequately disclosed the magnitude of OWN Program costs. As of April 2026, no formal lawsuit had been filed; the investigation was at a preliminary stage.¹⁰

Ahern Rentals Patent and Trade-Secret Case

In October 2020, competitor Ahern Rentals sued EquipmentShare in the U.S. District Court for the Eastern District of Texas, alleging willful patent infringement and trade-secret misappropriation. Ahern claimed EquipmentShare infringed a patent covering keyless digital telematics technology after co-founder Jabbok Schlacks obtained technical information during a meeting with the patent’s inventor. Ahern also alleged EquipmentShare had poached 200 to 300 of its employees and used their knowledge of Ahern’s customer contacts, sales data, and pricing. EquipmentShare denied infringement and called the suit “abusive litigation tactics.”¹¹

The patent case in the Eastern District of Texas was terminated in January 2022.¹² A related trade-secret case proceeded in the Western District of Missouri as part of multidistrict litigation. After the district court dismissed the claims, the Eighth Circuit reversed in February 2023, holding that Ahern’s allegations were sufficient to survive dismissal and remanding for further proceedings.¹³

California Wage Class Action

Former employee Kevin Dion Cocroft filed a class action against EquipmentShare in San Diego County Superior Court, alleging violations of California labor law including claims for minimum wage, overtime, meal and rest breaks, failure to reimburse work expenses, and inaccurate wage statements. The case settled, with final approval granted in November 2025 and settlement funds disbursed to claimants on January 21, 2026.¹⁴

Authorized Equipment Appeal

Authorized Equipment, Inc. has litigation against EquipmentShare pending before the Tennessee Court of Appeals (Case No. M2024-01802-COA-R3-CV, Davidson County). Oral arguments were scheduled for October 29, 2025.¹⁵ The underlying claims are not detailed in public reporting reviewed for this article.

Where Things Stand

The Chheda boardroom lawsuit in Texas is still active after the denial of his temporary injunction. The Republic Maximal fraud case against Chheda in Massachusetts remains pending. The Kirby McInerney securities investigation has not produced a formal complaint. The Ahern trade-secret case is back before the trial court on remand. The Cocroft settlement has been paid out. Through it all, the Schlacks brothers retain majority voting control through a dual-class share structure in which their Class B shares carry 20 votes each to the one vote of Class A shares.¹⁶

1
Ion Analytics (Debtwire). EquipmentShare Faces Lawsuit From Former Board Member Alleging Fraud, Undisclosed Related-Party Deals
2
Octus. Romulus EquipmentShare Board Removal Lawsuit
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Bloomberg Law. EquipmentShare Asks Judge to Reject Ousted Board Member’s Return
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Yahoo Finance. Former EquipmentShare Director Romulus Co-Founder Faces Allegations
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9fin. Lawsuit Former EquipmentShare Director
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Bloomberg. EquipmentShare Bonds Sink as Ousted Board Member Alleges Fraud
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Bloomberg Law. Court Rejects Ex-EquipmentShare Director’s Bid to Reclaim Seat
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BusinessWire. EquipmentShare Inc. Investor Alert
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U.S. Securities and Exchange Commission. EquipmentShare.com Inc. Registration Statement
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GlobeNewsWire. EQPT Investor Alert: Kirby McInerney LLP Investigates Potential Claims Involving EquipmentShare Inc.
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Rental Equipment Register. Ahern Rentals Sues EquipmentShare for Patent Infringement
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CourtListener. Ahern Rentals Inc. v. Equipmentshare.com Inc.
13
Eighth Circuit Court of Appeals. Ahern Rentals Inc. v. EquipmentShare.com Inc., No. 22-1399
14
Apex Class Action. EquipmentShare Settlement
15
Tennessee Courts. Authorized Equipment Inc. et al. v. Equipmentshare.com Inc. et al.
16
U.S. Securities and Exchange Commission. EquipmentShare.com Inc. Preliminary Prospectus