Elon Musk wins $2 billion Tesla shareholder lawsuit that accused him of bailing out his cousins’ solar company

Elon Musk (center) with his cousins ​​and SolarCity cofounders Lyndon Rive (left) and Peter Rive (right) in 2010.Mark Von Holden/AP Images for SolarCity

  • Elon Musk won a shareholder lawsuit over Tesla’s 2016 acquisition of solar company SolarCity.

  • The lawsuit said Musk essentially bailed out SolarCity, which was $3 billion in debt when Tesla bought it.

  • The judgment said although the acquisition process was “far from perfect,” the price Tesla paid was fair.

A judge has ruled that Elon Musk did not act unlawfully when Tesla bought solar-panel company SolarCity for $2.6 billion in 2016.

The acquisition was the subject of a Tesla shareholder lawsuit first filed in 2017 which accused Musk of bailing out SolarCity, which was $3 billion in debt when Tesla bought it. SolarCity was founded by Musk’s cousins ​​Lyndon and Peter Rive.

Musk sat on both the SolarCity and the Tesla boards when the acquisition went through.

In a 132-page judgment Vice Chancellor Joseph Slights III said the price Tesla paid for SolarCity was fair and Musk did not breach his fiduciary duty to Tesla shareholders.

Slights said Musk was “more involved in the process than a conflicted fiduciary should be” and the board’s process was “far from perfect,” but that ultimately the vetting process had been sufficient.

“Elon did not stand in its way,” Slights added.

The lawsuit is a big win for Musk, who would have been on the hook for more than $2 billion if he’d lost.

The lawsuit filed in 2017 originally targeted Tesla’s entire board but the other board member settled out of court for $60 million in January 2020. Only Musk decided to fight the case and he took the stand in court in July 2021.

Lee Rudy, the attorney for the plaintiffs, told The Wall Street Journal they were considering their options.

Read the original article on Business Insider

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