Court upholds Musk's win in $13 billion lawsuit over Tesla-SolarCity deal
Reuters
Published Jun 06, 2023 11:28AM ET
Updated Jun 06, 2023 06:25PM ET
By Tom Hals
(Reuters) -A trial court properly found that Tesla (NASDAQ:TSLA) Inc CEO Elon Musk did not push 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 biggest shareholder in both companies at the time, and Tesla shareholders alleged the billionaire pushed the carmaker's board into the deal to bail out his investment in the struggling rooftop solar company.
The state's highest court said that while a judge on the Delaware Court of Chancery erred in some portions of his analysis, his overall premise still supported his determination that Tesla paid a fair price for SolarCity.
Randall Baron, an attorney for the union pension funds and asset managers who sued, declined to comment.
The shareholders were appealing a 2022 ruling by Vice Chancellor Joseph Slights, who has since retired, that rejected shareholder claims that SolarCity was insolvent at the time of the deal.
They had argued that Slights wrongly relied on the market price for SolarCity, which the Tesla shareholders said was influenced by the solar panel company's selective disclosures about its finances.
They also argued that Slights determined after a 10-day trial in 2021 that Musk meddled in the deal but failed to hold him liable.
Shareholders wanted to force Musk to return the Tesla stock he received in the takeover, which at one point was worth $13 billion.
The Delaware Supreme Court said the presentation of Slights' ruling could have been better but overall his findings supported his conclusion, particularly the "total collapse" of the shareholders' theory that SolarCity was insolvent.
"The trial court’s opinion is replete with factual findings and credibility determinations, and those determinations have not been challenged and decidedly weigh in favor of Musk," the court said in a unanimous 106-page opinion.
Eric Talley, a Columbia Law School professor who joined a group of scholars in filing a friend of the court brief in support of Tesla shareholders, said he still had serious questions.
"In the end, perhaps more than anything, this outcome will add another hash mark on Elon Musk‘s belt for being able to avoid legal scrutiny," Talley said in an email.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.