. Musk to testify in defence of Tesla's $2.6 billion deal for SolarCity

Musk to testify in defence of Tesla’s $2.6 billion deal for SolarCity

Musk to testify in defence of Tesla’s $2.6 billion deal for SolarCity

12 Jul 2021

Tesla (NASDAQ:TSLA) Inc is trading up 0.63% at 656.95

Elon Musk is expected to take the stand on Monday to defend Tesla (NASDAQ:TSLA) Inc’s 2016 acquisition of SolarCity against a lawsuit by shareholders seeking to recoup the $2.6 billion the company paid for the ailing solar panel maker.

His testimony will kick off a two-week trial in Wilmington, Delaware, before Vice Chancellor Joseph Slights, who will decide whether the SolarCity deal was fair to Tesla stockholders.

The lawsuit by union pension funds and asset managers alleges the celebrity CEO strong-armed Tesla’s board to buy SolarCity, just as it was about to run out of cash. Musk owned a 22% stake in SolarCity, which was founded by his cousins.

Shareholders asked the court to order Musk, one of world’s richest people, to repay to Tesla what it spent on the deal, which would represent one of the largest judgments ever against an individual. However, even if the judge finds the deal was unfair, he could award a much lower number of damages.

Musk has argued the deal was fair and that it was negotiated by the Tesla board free of his influence and approved by fully informed stockholders.

He touted the deal at the time as central to his “Master Plan, Part Deux,” which aims to reshape transportation by using sustainable energy to power fleets of self-driving electric vehicles.

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