Court confirms Musk’s victory in $13 billion lawsuit over Tesla-SolarCity deal

June 6 (Reuters) – A trial rightly found Tesla Inc ( TSLA.O ) Chief Executive Elon Musk did not pressure the electric car maker to overpay for SolarCity in 2016, the Delaware Supreme Court said on Tuesday, ending years of litigation over $2.6 . billion dollar deal.

Musk was the largest shareholder in both companies at the time, and Tesla shareholders alleged the billionaire pushed the automaker̵[ads1]7;s board into the deal to bail out his investment in the struggling rooftop solar company.

The state’s highest court said that while a Delaware Court of Chancery judge was wrong in some parts of his analysis, his overall premise still supported his decision that Tesla paid a fair price for SolarCity.

Randall Baron, an attorney for the union’s pension fund and asset managers who sued, declined to comment.

The shareholders appealed a 2022 ruling by Vice Chancellor Joseph Slights, who has since resigned, that rejected shareholder claims that SolarCity was insolvent at the time of the deal.

They had argued that Slights wrongly relied on the market price of SolarCity, which Tesla shareholders said was influenced by the solar company’s selective disclosures about its financials.

They also argued that Slights decided after a 10-day trial in 2021 that Musk interfered in the deal, but failed to hold him accountable.

The shareholders wanted to force Musk to return the Tesla stock he received in the takeover, which at one point was worth $13 billion.

The Delaware Supreme Court said the presentation of Slight’s ruling could have been better, but overall his findings supported his conclusion, particularly the “total collapse” of the shareholders’ theory that SolarCity was insolvent.

“The court’s opinion is replete with factual findings and credibility determinations, and these determinations have not been challenged and weigh decisively in Musk’s favor,” the court said in a unanimous 106-page opinion.

Eric Talley, a professor at Columbia Law School who joined a group of researchers in filing an amicus brief in support of Tesla shareholders, said he still had serious questions.

“Finally, perhaps more than anything else, this result will put another hash mark on Elon Musk’s belt to avoid legal scrutiny,” Talley said in an email.

Reporting by Tom Hals in Wilmington, Delaware; Editing by Mark Porter and David Gregorio

Our standards: Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Tom Hals is an award-winning reporter with 25 years’ experience from Asia, Europe and the USA. Since 2009, he has covered legal issues and high-stakes court battles, ranging from pandemic policy challenges to Elon Musk’s campaign to end the Twitter deal. Contact: +6462002558

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