A Delaware court ruled in favor of Elon Musk over a shareholder lawsuit regarding Tesla’s acquisition of a solar power installer.
Several Tesla shareholders filed a suit against Musk on Jan. 18, 2022, accusing the company of bailing the solar installer business out due to Musk being related to the owners. The judge ruled that while Musk’s relationship with the business did create conflicts of interest, those tensions were mitigated in ways that did not conflict with his fiduciary duty.
“Elon was more involved in the process than a conflicted fiduciary should be,” wrote the judge in a Wednesday opinion. “And conflicts among other Tesla Board members were not completely neutralized. With that said, the Tesla Board meaningfully vetted the Acquisition, and Elon did not stand in its way.”
SolarCity was founded in 2006 by Musk’s cousins, Peter and Lyndon Rive. Musk held a significant role at the company as chairman of the board. The company was acquired by Tesla in 2016 for $2.6 billion, a decision that was met with skepticism by the company’s investors.
ELON MUSK WILL NOT TESTIFY IN FIERY TRIAL BETWEEN JOHNNY DEPP AND AMBER HEARD
Investors sued Tesla’s board over the charges, and every member of Tesla’s board except for Musk settled. The company CEO insisted that the matter be taken to trial.
While the shareholders attempted to frame Musk’s acquisition as an attempted bailout due to previous investments and his family interests, Musk said during the trial that the 2016 deal was part of his “master plan,” which he had written in 2006 as part of his desire to accelerate the viability of sustainable energy. The judge sided with Musk, saying that “the preponderance of the evidence reveals that Tesla paid a fair price — SolarCity was, at a minimum, worth what Tesla paid for it, and the acquisition otherwise was highly beneficial to Tesla.”
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Musk has been a major player in the news over the last month. Twitter agreed to accept Musk’s buyout offer of $44 billion on Monday. A New York court also ruled against Musk’s recent attempt to end his 2018 settlement with the Securities and Exchanges Commission.
