Elon Musk Defeats Investor Claims That Tesla's SolarCity Deal Was Improper
Tesla Inc. co-founder Elon Musk won’t have to hand over as much as $13 billion in shares of the electric car maker he got in a buyout of SolarCity after a judge found the world’s richest person didn’t improperly ram through an overpriced deal.
Delaware Chancery Court Judge Joseph Slights III Wednesday concluded the multi-billionaire -- who recently agreed to buy social-media powerhouse Twitter Inc. for $44 billion -- didn’t improperly use his influence with Tesla directors to prod them into acquiring the struggling solar power provider Musk founded with his cousins. Tesla investors demanded Musk return Tesla shares he received as part of the $2.6 billion deal in 2016.
Slights found that Musk, who served as SolarCity’s chairman and largest shareholder at the time of the purchase, didn’t jam the deal through at an inflated price at the expense of Tesla shareholders. Disgruntled Tesla shareholders argued SolarCity was insolvent at the time and not worth the price. They also said Musk failed to properly remove himself from the deal’s details.
“The preponderance of the evidence reveals that Tesla paid a fair price -- SolarCity was, at a minimum, worth what Tesla paid for it, and the acquisition otherwise was highly beneficial to Tesla,” Slights said in his 131-page ruling.
The judge faulted Musk for failing to properly remove himself from involvement in the deal, while concluding it wasn’t a fatal flaw in the transaction.
The Delaware Supreme Court will probably be asked to review the ruling. Randy Baron, a lawyer for the investors, said he’s studying options for an appeal.
“This case was about a simple principle -- loyalty to shareholders,” he said in an emailed statement. “The court’s decision recognized there were flaws in the
Read more on tech.hindustantimes.com
