Tesla’s CEO Elon Musk will be appearing in Delaware’s Court of Chancery on July 12 to defend against allegations that he orchestrated the bailout of SolarCity.
Tesla acquired SolarCity which was owned by Musk’s cousins, Lyndon Rive and Peter Rive, in 2016.
The union pension funds and asset managers leading the case accused Musk of using his control of Tesla to force the company in 2016 to rescue solar panel maker SolarCity. They wanted Musk to repay to Tesla the cost of the $2.6 billion deal and to disgorge the profits on his SolarCity stock.
The suit had also accused Tesla’s board of lax corporate governance. Musk and the rest of the Tesla board benefitted from the deal “at the expense of Tesla and its minority stockholders,”
Musk had a 22% stake in SolarCity and was its chairman.
Musk has noted in court papers that the SolarCity deal has been a huge success for Tesla shareholders, demonstrating the deal was not only fair but a boon.
SolarCity has risen to $652 from near $37 a share when the deal closed in November 2016.
© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.