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Elon Musk wins lawsuit over Tesla’s acquisition of SolarCity




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SAN FRANCISCO – Elon Musk did not break his duty of trust to Tesla when the company acquired the solar energy company SolarCity, a judge in Delaware Chancery Court ruled on Wednesday. The decision was delivered in a 132-page statement.

In his opinion, Judge Joseph R. Slights III wrote: “My judgment is in defense of all allegations.”

Tesla acquired SolarCity for $ 2.6 billion in 2016. At the time, Musk owned a large portion of SolarCity, which was run by two of his cousins. Tesla shareholders claimed that Musk acted in its own interest with the purchase, instead of the electric car company, now the world’s most valuable car manufacturer.

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Musk himself had taken a stand in the SolarCity suit last summer, and defended Tesla’s decision to buy the solar cell company when he put the agreement in relation to the planet’s future.

The decision adds a number of legal victories for Musk in high-profile lawsuits that posed a risk to both him and Tesla. Musk was not held responsible, for example in the defamation lawsuit in 2018 which involved a Thai cave rescue driver he had called a “pedo guy”. And even though he resigned from the Tesla presidency after a 2018 tweet that he had “secured funding” to take Tesla privately to $ 420 per share, Musk retained control of the company and later became the world’s richest person.

The latest threat to Tesla is Musk’s $ 44 billion deal this week to take over social media company Twitter. He uses billions of dollars worth of Tesla’s share as collateral to pay for Twitter, a move that caused Tesla’s shares to fall by more than $ 100 billion on Tuesday.

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In the SolarCity lawsuit, Musk could have had to pay back as much as $ 2 billion to Tesla.

Beyond the potential punishment, the case was also a referendum on Musk’s cheeky leadership style – in which he aggressively pursued his interests, sometimes independent of established processes.

Slights nodded to Musk’s unusual degree of involvement in the deal in his opinion on Wednesday.

“The process used by the Tesla board to negotiate and ultimately recommend the acquisition was far from perfect. Elon was more involved in the process than a conflict-ridden trustee should be,” he wrote. “With that said, the Tesla board considered the acquisition meaningful, and Elon did not stand in the way of it.”

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Slights also said that Tesla paid a reasonable price for SolarCity in the agreement.

“SolarCity was at least worth what Tesla paid for it,” he wrote, “and the acquisition was otherwise very beneficial to Tesla.”



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