Elon Musk Jabs at Opposing Counsel in Court Defense of Tesla’s SolarCity Purchase – The Wall Street Journal
Elon Musk Jabs at
Opposing Counsel in Court
Defense of Tesla’s SolarCity Purchase
WILMINGTON, Del.— Tesla Inc. Chief Executive Elon Musk on Monday defended the electric-vehicle maker’s purchase of SolarCity Corp. in court, telling a Delaware judge that he didn’t act improperly during the negotiating process.
The case dates back to 2016 when Mr. Musk as chairman of both the then-unprofitable companies. His solution to improve their outlook: combine them in a roughly $2.1 billion tie-up to establish a single clean-energy business. Plaintiffs, which include several pension funds that owned Tesla stock, have characterized the deal as a scheme to benefit himself and bail out a home-solar company on the verge of insolvency.
Mr. Musk was the opening witness called in Delaware Chancery Court in a nonjury trial that is expected to run about two weeks. The attorneys for Mr. Musk have framed the acquisition as an opportunity to realize his long-held goal of creating a vertically integrated sustainable energy company.
A primary question in the case is whether Mr. Musk, who owned roughly 22% of Tesla at the time, controlled the transaction. Proving that claim is a challenge because Mr. Musk was a minority shareholder of Tesla and the company’s shareholders approved the acquisition. Lawyers for Mr. Musk have said that SolarCity was worth more than Tesla paid for it and the electric-vehicle maker’s board members, who included Mr. Musk’s brother, Kimbal Musk, acted independently.
Other issues before the judge include whether Tesla board members, some of whom also were SolarCity shareholders personally or through investment funds they managed, were conflicted and whether vital information about the deal was withheld from shareholders. Mr. Musk said Monday that an independent director handled the negotiation and that Tesla’s directors even overruled his proposal that Tesla provides temporary financing to SolarCity before the deal went through.