Elon Musk has prevailed in consolidated Delaware Chancery Court shareholder suits filed over the buyout of Solar City by electric car maker Tesla.
Plaintiffs had alleged that Musk acted improperly in getting the Tesla board to approve the Solar City acquisition. Musk had stock in both companies, with members of his family having stakes in Solar City.
Earlier, Tesla board members settled with shareholders in a $60 million settlement funded by insurance. Musk chose to fight on in Chancery.
The lawsuits led to a summer 2021 trial in Wilmington, with Musk giving testimony. His appearance attracted media attention and fans who wanted to catch a glimpse of one of the world’s richest men.
In his decision, Vice Chancellor Joseph Slights wrote that the plaintiffs’ claims against Elon, and Elon’s defenses, “call out like a carnival barker, beckoning the court to explore a wide range of interesting and arguably unsettled legal issues.”
However, while acknowledging that the process of acquiring Solar City was far from perfect, Slights ruled that “the persuasive evidence reveals that the acquisition was entirely fair. “
Slights went on to write that the acquisition was beneficial to Tesla, which builds batteries that are used to store power from Solar City solar panels.
Sllights did not buy the argument of suing shareholders who claimed that SolarCity was in such dire financial shape that it was worthless and did not merit a $2.6 billion stock buyout price. Some had speculated that the vice chancellor would order Musk to pay back the $2.6 billion to shareholders.
The 134-page decision comes with a timeline of activities between Solar City and Tesla and arguments presented by both sides in the case.
Slights has announced his retirement from the court known for handling high-profile corporate disputes. Musk is now working to acquire social media company Twitter for $44 billion.
Click here for the Chancery decision.
