Tesla Inc.’s CEO Elon Musk has finally won a victory in a years-long lawsuit. On Tuesday, the Delaware Supreme Court ruled that Elon Musk did not force Tesla Inc. to overpay for the rooftop solar company when he acquired SolarCity in 2016.
At the time, Elon Musk was the largest shareholder in both companies, and some of Tesla’s shareholders accused Elon Musk of pushing Tesla’s board to make the deal to save his investment in SolarCity, a troubled company, in a deal worth $2.6 billion (currently about RMB 18.512 billion).
The state’s highest court said that while a Delaware Court of Chancery judge erred in part of his analysis, his overall argument still supported his judgment that Tesla paid a fair price for Solar City.
The appeal was filed by a group of union pension funds and asset managers who appealed a 2022 ruling by Joseph Slights, an associate judge at the Court of Chancery. Slights has since retired, and at the time the ruling rejected shareholder claims that SolarCity was insolvent at the time of the deal.
The appellants argued that Slights wrongly relied on Solar City’s market price, which was influenced by Solar’s selective disclosure of its financial condition. They also argue that Slates found Elon Musk interfered with the deal after a 10-day trial in 2021, but failed to hold him accountable.
Shareholders want to force Elon Musk to return the Tesla stock he received in the acquisition, which was once worth $13 billion.
The Delaware Supreme Court said that while Slates’ presentation of the ruling could be improved, his findings generally supported his conclusions, particularly the “complete collapse” of the shareholders’ theory that Solar City was insolvent.
