A Delaware judge has sided with Elon Musk in a fierce lawsuit by Tesla shareholders, accusing the executive of forcing the electric vehicle company’s board to buy SolarCity in 2016.
Shareholders are seeking up to $13 billion in damages, claiming that Tesla’s $2.6 billion SolarCity deal amounted to “a bailout from financial distress, a bailout orchestrated by Elon Musk,” as stated in a statement by plaintiff’s attorney, Randy, in January is called Baron. While the court found that Musk was “more involved in the process than a conflicted trustee should be,” it ultimately ruled in favor of “technoking” on all counts. Shareholders still have the option of filing an objection.
At the time of the deal, Musk’s ties to Solar City ran deep. The defunct solar energy company was co-founded and co-run by Musk’s first cousins, Lyndon and Peter Rive, and Musk was Solar City’s largest shareholder and chairman.
“[The] Tesla’s board of directors has meaningfully reviewed the acquisition, and Elon has not stood in the way of it,” Vice Chancellor Joseph Slight said in a statement. “Equally, if not more importantly, the overwhelming evidence shows that Tesla paid a fair price — SolarCity was worth at least what Tesla paid for it,” Slights added.
The ruling is a clear victory for Musk, but the court declined to force shareholders to pay his legal fees. Slights concluded that the Tesla boss and Twitter admirer “probably could have avoided the case in the first place” “if he had simply followed basic corporate governance rules in conflict transactions.”