- Title: Musk says didn't set deal terms for Tesla acquisition of SolarCity
- Date: 13th July 2021
- Summary: WILMINGTON, DELAWARE, UNITED STATES (JULY 13, 2021) (REUTERS) TESLA CEO ELON MUSK LEAVING COURTHOUSE, WAVING AND SPEAKING TO SPECTATOR, GETTING INTO WHITE TESLA VEHICLE MEN GETTING INTO CAR, DRIVING AWAY
- Embargoed: 27th July 2021 20:29
- Keywords: Musk SolarCity Tesla electric vehicles
- Location: WILMINGTON, DELAWARE, UNITED STATES
- City: WILMINGTON, DELAWARE, UNITED STATES
- Country: USA
- Topics: Company News Markets,Economic Events,United States
- Reuters ID: LVA001ELODXS7
- Aspect Ratio: 16:9
- Story Text:Elon Musk on Tuesday (July 13) defended his handling of Tesla Inc.'s, $2.6 billion merger negotiations with SolarCity, denying claims that he dictated a price the electric vehicle maker would pay for the ailing solar panel maker.
The lawsuit by union pension funds and asset managers alleges Musk strong-armed Tesla directors in 2016 into using the company to rescue SolarCity from the brink of bankruptcy, benefiting Musk.
Musk at the time owned a 22% stake in both Tesla and SolarCity, which was founded by his cousins. The Tesla shareholders want Musk to be ordered to return the value of the deal to Tesla.
Proceedings on Tuesday were briefly interrupted when an unidentified person, who was not Musk, vomited in the court, according to a court official. Building security said the trial would resume in two hours.
The two-week trial in the Court of Chancery in Wilmington, Delaware, kicked off Monday and is being overseen by Vice Chancellor Joseph Slights.
Musk has consistently told the court that the Tesla board primarily handled the SolarCity deal and he was not part of the board committee that negotiated the terms.
On Tuesday, shareholder attorney Randall Baron, however, pressed Musk to explain meeting notes taken by a financial advisor showing Musk suggested the board offer a $28.50 share price for SolarCity. Baron asked whether that conflicted with Musk's statement that he had fully recused himself from negotiations.
"I was making the obvious point that any offer, if not publicly defensible, will be rejected by SolarCity shareholders," Musk said during proceedings in which cameras were not allowed.
Central to the case are claims that despite owning only 22% of Tesla, Musk was a controlling shareholder due to his ties to board members and domineering style. If plaintiffs can prove this, it increases the likelihood that the court will conclude the deal was unfair to shareholders.
Legal experts said the judge will be looking for evidence that Musk threatened board members or that directors felt they could not stand up to him. Board members and others involved in the 2016 deal, including Musk's younger brother Kimbal, will testify beginning as soon as Tuesday.
The company's directors settled allegations from the same lawsuit last year for $60 million, paid by insurance, without admitting fault.
(Production: Kevin Fogarty, Katharine Jackson)
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