A Delaware judge sided with Elon Musk in the A . case Huge lawsuit It was brought in by Tesla shareholders, who accused the CEO of forcing the electric car company’s board of directors to buy SolarCity back in 2016.
Demanding as much as $13 billion in damages, shareholders alleged that Tesla’s $2.6 billion SolarCity deal, which includes all shares, was a “distress rescue, bailout, orchestrated by Elon Musk,” January statement From the plaintiff’s attorney, Randy Barron. While the court found that Musk “was more involved in the process than a conflicting fiduciary agent should have been,” it ultimately ruled in favor of “Technic” on all charges against him. Shareholders still have the option to file an appeal.
At the time of the deal, Musk’s connections to the solar city were deep. The non-profit solar company was co-founded and led by Musk’s early cousins, Lyndon and Peter Reeve, and Musk was SolarCity. largest shareholder and Chairman of the Board of Directors.
“[The] The Tesla board of directors purposefully examined the acquisition, and Elon did not stand in its way,” read Vice Chancellor Joseph Slates’ opinion. “Equal if not more important, the predominance of evidence reveals that Tesla paid a fair price — it was SolarCity,” Slates added. At least, it’s worth what Tesla paid for it.”
The ruling is a clear win for Musk, but the court refused to force shareholders to cover his legal fees. Slights concluded that the head of Tesla and address twitter “He would probably have avoided the ‘issue in the first place,’ had he simply followed the ground rules of good corporate governance in conflicting transactions.”