The Tesla-SolarCity deal was not made under the influence of Elon Musk, upholds the court. The Delaware Supreme Court’s decision ends a years-long lawsuit over a $2.6 billion deal.
Elon Musk did not push Tesla to overpay for SolarCity in 2016, the court concluded
The Delaware Supreme Court on Tuesday ruled that a trial court properly found that Tesla CEO Elon Musk did not push the company to overpay for SolarCity in 2016. With this decision, a multi-year lawsuit to buy SolarCity for $2.6 billion ends.
Shareholders who sued failed to prove their accusations
When the purchase took place, Musk was the largest shareholder in both companies. Referring to this, some Tesla shareholders claimed that he pushed the Tesla board into a deal. They said Musk’s goal was to save his investment in SolarCity, which was struggling at the time. Investors also claimed that under Musk’s influence, Tesla paid an unfairly high price to buy SolarCity.
Shareholders also claimed that SolarCity only selectively disclosed information about its finances before the deal. They wanted to force Musk to return the Tesla shares he received in the takeover, which at one point were worth $13 billion.
Shareholder claims have already been rejected by the Delaware Court in 2022
In 2022, the Delaware Court of Chancery’s Vice Chancellor Joseph Slights denied shareholder claims that SolarCity was insolvent at the time of the deal. The state’s highest court said that while Slights was wrong in some parts of his analysis, his overall ruling that Tesla paid a fair price for SolarCity is correct.
« The trial court’s opinion is replete with factual findings and credibility determinations, and those determinations have not been challenged and decidedly weigh in favor of Musk, » the Delaware Supreme Court said in a unanimous 106-page opinion.