Elon Musk defeats investor claims that Tesla’s SolarCity deal was improper
Tesla CEO Elon Musk has won a hefty lawsuit brought by Tesla shareholders, which accused the executive of coercing the electric vehicle company’s board into buying SolarCity back in 2016.
According to TechCrunch, seeking as much as $13 billion in damages, the shareholders alleged that Tesla’s $2.6 billion, all-stock SolarCity deal amounted to “rescue from financial distress, a bailout, orchestrated by Elon Musk,” as per a January statement from the plaintiff’s attorney, Randy Baron.
“[The] Tesla Board meaningfully vetted the Acquisition, and Elon did not stand in its way,” read the opinion by Vice Chancellor Joseph Slights.
The court observed that Musk “was more involved in the process than a conflicted fiduciary should be,” it ultimately ruled in favour of the “techno king” on all counts. Shareholders still have the option to file an appeal, the report said.
At the time of the deal, Musk’s connections to SolarCity ran deep. The unprofitable solar energy firm was co-founded and co-led by Musk’s first cousins, Lyndon and Peter Rive, and Musk was SolarCity’s largest shareholder and chairman.
[With Inputs from IANS]
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