SAN FRANCISCO – Elon Musk did not breach his trust with Tesla when the company acquired solar energy company SolarCity, a Delaware District Court judge ruled Wednesday. The decision, issued in a 132-page opinion, absolved Musk of legal responsibility in a battle that has been raging at Tesla for years since the shareholders filed a lawsuit. “[My] The verdict is for the defense of all the claims “, wrote in his opinion the judge, Joseph R. Slights III. Tesla acquired SolarCity for $ 2.6 billion in 2016. Musk owned a large stake in SolarCity at the time, which was run by two of his cousins. Tesla shareholders have claimed that Musk acted in his own interest with the market, not the electric vehicle company, which is now the most valuable carmaker in the world. The shareholders had argued that the acquisition of SolarCity was tantamount to rescuing a troubled company involving family members. Elon Musk defends Tesla solar deal in court, calls rival lawyer “bad man” In his view, Slights summed up the plaintiffs’ view: that Musk gave the green light to Tesla’s “servile” board to acquire an “insolvent” SolarCity to save an investment from him and his family members who did not it was coming out. “This, the plaintiffs say, was a clear breach of Elon’s duty of fidelity,” Slic wrote. Musk himself took a stand in the SolarCity suit last summer, defending Tesla’s decision to buy the solar company when it struck a deal on the future of the planet. He also attacked a plaintiff’s lawyer as a “bad man”. The lawsuit also alleges that Musk allegedly controlled the board. Musk, the plaintiffs claimed, exercised sovereignty over the board as he tried to finalize the deal. Slights disagreed, however, pointing to cases where he found the board rejected Musk. “Elon undoubtedly participated in the settlement process in ways he should not, but fortunately, Tesla’s board ensured, however, that the process led to a fair price,” the judge wrote. Musk did not immediately respond to a request for comment. Randall Baron, the plaintiffs’ lawyer, said: “The court has recognized significant conflicts and shortcomings in the process of approving the agreement. “We are carefully considering the court decision and we are considering the appropriate next steps in consultation with our clients.” The ruling adds to a series of legal victories for Musk in high-profile litigation that posed risks to both him and Tesla. Musk was not held responsible, for example, in the 2018 defamation suit involving a Thai cave rescue diver he called “child-children”. And although he resigned as chairman of Tesla after a 2018 tweet that he had “secured funding” to privatize Tesla at $ 420 a share, Musk retained control of the company and later became the richest man in the world. The latest threat to Tesla is Musk’s $ 44 billion deal this week to acquire social media company Twitter. He is using his billion-dollar stake in Tesla as collateral to pay for Twitter, a move that pushed Tesla’s stock down more than $ 100 billion on Tuesday. Tesla’s value fell more than double on Tuesday from Twitter costs In the SolarCity test, Musk would have to pay up to $ 2 billion to Tesla. In addition to this possible sentence, the lawsuit was also a referendum on Musk’s brazen leadership style – in which he aggressively pursued his own interests, sometimes regardless of established procedures. “If he were found to be liable for damages, that would be bad for Tesla,” said Alexander Manglinong, an associate lawyer focusing on business disputes at Stubbs Alderton & Markiles. “In turn, provoking this would be just another reason to add it to this list because the Board may want to reconsider who will be the CEO.” Slaich nodded at Musk’s unusual level of involvement in the deal, according to his opinion on Wednesday. “The process used by Tesla’s board to negotiate and finally propose the acquisition was not perfect at all. “Elon was more involved in the process than he should have been as a conflicting trustee,” he wrote. “With those words, the Tesla Board of Directors effectively considered the Acquisition and Elon did not stand in the way.” How Elon Musk from Sleeping in the Factory Reached the Threshold of Launching a Crew into Space Slights also said Tesla paid a fair price for SolarCity in the deal. “SolarCity was worth at least as much as Tesla paid for it,” he wrote, “and the Acquisition was otherwise extremely profitable for Tesla.” In recent years, the SolarCity investment has been dismissed as a blunder by Tesla. Some have blamed Musk for Tesla’s dispute over the subsidiary’s weaknesses in introducing Tesla’s clean energy targets. Walmart in 2019 filed a lawsuit against Tesla over a series of seven solar panels fires in stores across the country, an example of the kind of disputes Tesla faced after the purchase. Tesla and Walmart have reached an agreement, CNBC reported. In his view, Slights considered the applicants’ arguments that Tesla and SolarCity had not incorporated. Examples included the termination of thousands of solar-focused workers by Tesla and the reduction in the development of solar components after Musk “reused” SolarCity employees to work on the development of the Model 3, Tesla’s mass-market sedan. . These examples were true, he said, but “the fact that SolarCity is not yet fully integrated into Tesla does not diminish the substantial synergies that have already been achieved, not to mention the enormous potential for synergies that have not yet been achieved.”
