Investors argue Musk ought to repay $9.4 bln to Tesla for SolarCity deal

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WILMINGTON, Del., Oct 4 (Reuters) – A Delaware choose ought to order Elon Musk to repay $9.4 billion to Tesla Inc (TSLA.O) for the advantages he obtained by pushing the electrical car maker in 2016 to purchase an ailing photo voltaic firm he partly owned, based on Tesla traders in a courtroom submitting late Friday.

The traders stated a “simple and practical” technique to undo the advantages they are saying Musk improperly obtained from the $2.6 billion deal for SolarCity can be to order the chief government to return the Tesla shares he obtained for his inventory within the rooftop photo voltaic firm.

Musk obtained 2.4 million Tesla shares, which have grown to 12 million shares because of inventory splits and are at present value about $9.4 billion. The traders stated Musk, one of many world’s richest individuals, might additionally repay the worth of the inventory to the corporate.

Tesla inventory was up 2.5% in early Monday buying and selling at $792.76 per share.

The lawsuit was introduced by union pension funds and asset managers. They allege of their post-trial temporary that Musk didn’t recuse himself from the deal negotiations and by no means disclosed SolarCity was practically out of money.

Musk stated in his personal post-trial temporary filed late Friday that SolarCity was the fruits of a decade-long plan to create a vertically built-in clear power firm providing roof-top photo voltaic era mixed with Tesla’s battery storage and autos.

He stated the deal was struck at a good value and authorized by 85% of Tesla shareholders. learn extra

The briefs comply with a two-week trial in July in Wilmington, Delaware. learn extra

The choose, Vice Chancellor Joseph Slights, should nonetheless reply a key query that would decide the end result of the case – whether or not Musk is a controlling shareholder regardless of proudly owning a minority stake in Tesla. learn extra

Slights has scheduled post-trial arguments for January and a ruling would probably happen months after that.

Reporting by Tom Hals in Wilmington, Delaware, Editing by Rosalba O’Brien

Tesla CEO Elon Musk reacts to onlookers as he departs after taking the stand to defend Tesla Inc's 2016 deal for SolarCity in a case before the Delaware Court of Chancery in Wilmington, Delaware, U.S. July 12, 2021. REUTERS/Jonathan Ernst