Elon Musk Wins In $13B Lawsuit Related To Tesla's SolarCity Deal
The judge finds that Musk didn't persuade Tesla to acquire SolarCity simply to personally enrich himself.
We just reported about Musk losing one court battle, and now it appears he just won a different lawsuit. As we've said on a number of occasions, it's a rocky road for Musk as he's constantly involved in lawsuits, and there's no telling how they might turn out. In this recent Tesla/SolarCity case, the judge ruled in Musk's favor.
Some Tesla shareholders have complained that CEO Elon Musk persuaded the company's board to buy Solar City. They hoped Musk would be found guilty, and worked to get up to $13 billion in damages. For those unaware, SolarCity was a rooftop solar company that was struggling to survive back in 2016 and prior.
As reported by Reuters, the judge ruled that Musk wasn't working to "unjustly enrich himself" when he convinced Tesla's board to agree to purchase SolarCity. Keep in mind that Musk, at the time, was SolarCity's chairman and largest shareholder. Joseph Slights, Vice Chancellor of Delaware's Court of Chancery shared the following as part of his opinion:
"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."
After a 10-day trial and two full days of testimony from Musk, the judge did note that the vocal CEO may have been more involved in the transaction than was necessary. However, the fact that a fair price was agreed upon holds more weight.
The judge went on to say that Musk took part in many Tesla board discussions surrounding the potential deal. However, he also made it clear that the board did stand up to Musk in various instances. The board didn't follow all of the CEO's requests, nor did it go along with his proposed timing of the acquisition.
Shareholders can appeal the decision, and some are already considering the possibility. The plaintiffs' lawyer Randall Baron said via Reuters:
"The case is about loyalty. The court's decision acknowledges that Elon Musk was conflicted and there were flaws in the process."
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Source: Reuters
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