Elon Musk Has Won The Shareholder Lawsuit Over Tesla’s $2.6 Billion SolarCity Acquisition

A Delaware court has ruled in favour of Elon Musk in a class-action complaint filed by Tesla shareholders accusing him of pressuring the electric vehicle company’s board of directors to purchase SolarCity in 2016.

According to a January statement from the plaintiff’s attorney, Randy Baron, the shareholders claim that Tesla’s $2.6 billion all-stock SolarCity transaction amounted to “a rescue from financial trouble, a bailout, organized by Elon Musk.”

Elon Musk defends Tesla's $2.6B acquisition of SolarCity in Delaware court  | TechCrunch

Despite finding that Musk “was more involved in the process than a conflicted fiduciary should be,” the court finally decided in favour of the “techno king” on all grounds. However, there is still time for shareholders to file an appeal.

Musk’s ties to Solar City were extensive at the time of purchase. Musk’s first cousins, Lyndon and Peter Rive co-founded and co-led the unprofitable solar energy company Solar City, and Musk was the company’s largest shareholder and chairman.

Musk Tesla SolarCity

Vice-Chancellor Joseph Slights’ judgement stated, “the Tesla Board meaningfully reviewed the Acquisition, and Elon did not stand in its way.”

“Equally if not more important, the preponderance of the evidence reveals that Tesla paid a fair price — SolarCity was, at a minimum, worth what Tesla paid for it,” Slights added.

Elon Musk's vision is not for the faint of heart | Reuters.com

Although the court ruled in Musk’s favour, the court declined to require the shareholders to pay his legal expenses. Slights concluded that the Tesla CEO and Twitter suitor “could have avoided” the situation if he had merely followed “the ground rules of good corporate governance in conflict transactions.”

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