Elon Musk CEO of Tesla, is expected in court today, this decision is at stake after tesla bought SolarCity. If Elon Musk loses, he may have to pay more than $2 billion of his considerable personal fortune.
A group of shareholders wants the court to decide whether, when Elon Musk, decided in 2016 to acquire SolarCity to use it for Tesla’s benefit or for itself.
In 2016, Tesla acquired SolarCity, a solar panel company, in a $2.6 billion deal. At the time, the deal was approved by 85% of tesla’s shareholders, but not everyone was happy with the deal.
Musk will be the first witness in a trial to defend his role in Tesla’s $2.6 billion acquisition of SolarCity.
The group of shareholders has filed a lawsuit against Elon Musk, which will today appear in court to defend the deal.
The indictment states that the deal contributed to the increase in the wealth of the Musk family and that he took advantage of his dominant position in Tesla to force the deal, generating an overvaluation of SolarCity, which would have been in financial difficulties.
Elon Musk continues to say that he withdrew from the negotiations and that it was the remaining administrators who approved the purchase of SolarCity, which would be necessary for the strategic plan defined by Tesla and which is still in force.
Elon Musk and the others involved failed to reveal pertinent details of the deal and are accused of breaching trust.
The remaining SolarCity partners reached an agreement with the group of shareholders, having paid 60 million dollars to avoid the court case. Only Elon Musk decided to take the case to court, always insisting that what he did was for Telsa’s benefit and not for personal benefit.
In addition to Musk, the indictment claims that four members of Tesla’s board were “directly or indirectly” linked to the share capital of the solar panel company and that they even tried to increase the financial envelope invested in the company.
“We are highly dependent on the services of Elon Musk”, reads the introduction to Tesla’s annual report for the year 2020.
His fate will be determined today by the Delaware Court of Chancery judge, Vice Chancellor Joseph Slights III.