The Tesla CEO will give testimony regarding the $2.5 billion agreement in the Delaware Court of Chancery on Monday in a shareholder court case. The lawsuit claims that Tesla’s purchase of SolarCity was riddled with conflicting interests, ignored this company’s foundational weak points, and, predictably, failed to deliver the revenues Musk had assured. SolarCity Corporation, located in Fremont, California, is a publically listed business that manufactured and installed solar panels, along with other associated goods and solutions to household, industrial, as well as commercial clientele.
Elon Musk praised Tesla Inc.’s 2016 takeover of SolarCity as, a transaction that would unite the top manufacturer of electric vehicles with a solar panel maker that can charge EVs. Musk was SolarCity’s leading shareholder and chairman during the time of the all-stock transaction. Seven shareholder cases were combined into one, alleging that Tesla’s board violated their fiduciary responsibilities by bending to Musk’s desires and opting to purchase the troubled business. SolarCity was created by Musk and two of his cousins, Lyndon and Peter Rive, reflecting what the lawsuits claim to be an obvious conflict of interest. A judge granted a $60 million agreement in August which settled allegations filed against all of Tesla’s directors but Musk with no acknowledgment of wrongdoing.
Tesla, which has abolished its public communications division, did not comment on the case. The firm started in its 2020 yearly statement that the case had lacked basis. and that the company will fiercely represent itself. Last year, Tesla’s power generating and storing business earned $1.9 billion in profits, a 24% increase over the preceding year. The majority of these earnings came from the sales of batteries. Tesla does not indicate if the company earned a return, although it does have debt and costs.
Musk does have a track record of battling federal agencies and litigation. He was fined $20 million by the Securities and Exchange Commission for falsely claiming on Twitter that he had the funds to take the firm private. Even if Elon is forced to repay for the entire SolarCity acquisition himself as a result of the lawsuit, $2.5 billion won’t severely affect the world’s, third-richest man. According to Forbes magazine, Musk is worth around $163 billion.