June 6 (Portal) – A court has rightly found that Tesla Inc. (TSLA.O) CEO Elon Musk did not pressure the electric carmaker to overpay for SolarCity in 2016, the Delaware Supreme Court said on Tuesday, ending years of litigation over the $2.6 billion deal.
Musk was the largest shareholder of both companies at the time, and Tesla shareholders claimed the billionaire pushed the automaker’s board into the deal to salvage its investment in the ailing rooftop solar company.
The state’s highest court said that while a judge at the Delaware Court of Chancery erred in some parts of his analysis, his overall premise supported his finding that Tesla paid a fair price for SolarCity.
Randall Baron, an attorney for the plaintiff union pension funds and asset managers, declined to comment.
Shareholders appealed a 2022 decision by now-retired Vice Chancellor Joseph Slights dismissing shareholders’ claims that SolarCity was insolvent at the time of the deal.
They had argued that Slights erroneously relied on the market price for SolarCity, which Tesla shareholders say was affected by the solar panel company’s selective disclosures about its finances.
They also argued that after a 10-day trial in 2021, Slights concluded that Musk interfered with the deal but did not hold him liable.
Shareholders wanted to force Musk to give back the Tesla shares he received in the acquisition, which were once worth $13 billion.
The Delaware Supreme Court said Slights’ presentation of Slights’ ruling could have been better, but overall its findings supported its conclusion, particularly the “complete collapse” of shareholders’ theory that SolarCity was insolvent.
“The trial court’s opinion is replete with findings of fact and findings of credibility, and these findings have not been challenged and speak strongly in Musk’s favor,” the court said in a unanimous 106-page statement.
Columbia Law School professor Eric Talley, who along with a group of scientists delivered a brief to a court friend in support of Tesla shareholders, said he still had serious questions.
“Ultimately, perhaps more than anything else, this result will give Elon Musk another hashtag for escaping legal scrutiny,” Talley said in an email.
Reporting by Tom Hals in Wilmington, Delaware; Edited by Mark Porter and David Gregorio
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