By Tyler Durden,
Tesla investors continued to try and convince Vice Chancellor Joseph Slights of Delaware's Court of Chancery that Elon Musk "bailed out" his cousin's company, SolarCity, to the tune of $13 billion that needs to be returned to shareholders, this week.
During closing arguments to a 10 day trial, Randy Baron, an attorney for shareholders, said: "This case has always been about whether the acquisition of SolarCity was a rescue from financial distress, a bailout, orchestrated by Elon Musk."
Baron is urging that Musk be ordered to pay $13 billion back to Tesla shareholders. He is representing union pension funds and asset managers, among other parties, in arguing that Musk forced the deal onto the Tesla board.
Musk has argued that the deal was part of a "master plan" to try and vertically integrate the two companies, according to Reuters.
Evan Chesler, a lawyer for Musk, argued that Musk was in the process of "...building billions of dollars of long-term value". Musk has argued the sum would be a "windfall" for the plaintiffs.
But shareholder attorney Lee Rudy rebutted: "It would be a windfall for Elon Musk if he got to keep shares he never should have gotten in the first place."
Recall, we took live notes on Elon Musk's testimony during the trial over the summer, where the CEO appeared on the stand for more than 2 days. Hanging in the balance of the trial is the question of whether or not Tesla was damaged as a result of the Solar City merger and, if so, if Elon Musk was the responsible party.
Tesla has argued that the company's shareholders "overwhelmingly voted" to approve the bailout, according to FT. Ann Lipton, law professor at Tulane University in New Orleans told FT: “The case has the potential to provide more guidance not only to courts, but also to deal planners, as to the factors courts are likely to take into account when determining whether someone is a controller.”
Delaware Court of Chancery vice-chancellor Joseph Slights wrote in 2018 that “it is reasonably conceivable that Musk, as a controlling stockholder, controlled the Tesla board in connection with the acquisition” and that “there were practically no steps taken to separate Musk from the board’s consideration of the acquisition”.
Source : zerohedge.com/markets/tesla-shareholders-seek-13-billion-repayment-solar-city-bailout