New Delhi: Is Elon Musk Control Tesla Inc.
or Is Tesla Control Elon Musk? More than $ 2 billion hinges on the question as experiments began on Monday.
The shareholders accused the musk using his control against Tesla to force the company in 2016 to save SolarCity, save solar panel makers – and musk investment in the company – from bankruptcy.
Union pension funds and asset managers led the case of wanted musk to pay Tesla cost $ 2.6 billion in agreement and to trigger profits on the stock solarcity.
If they win, it will be one of the biggest assessments of an individual.
The two-week trial at the Chancellor Court in Wilmington, Delaware, will boil on whether the Musk, which has around 22% of Tesla at the time of the agreement, is a rarely controlled shareholder who does not have a majority shares.
“I think it would be very difficult for the court to ignore the fact that Elon Musk was Elon Musk and his relationship with Tesla,” said Ann Lipton, a professor at Tulane University Law School.
He said this case might present an unusual situation given the status of the celebrity musk, his personal bond to the Tesla council member and the financial association of the council members to SolarCity.
“Collect everything, and may be enough to count as a controlling shareholder,” he said.
Some executives dominated the image of their company as much as the Musk, which was known for mocking regulators, against opponents and personally involved with 57 million twitter followers.
“We are very dependent on the service of Elon Musk, Technoking of Tesla and our Chief Executive Officer,” said Tesla’s 2020 annual report.
The Plaintiff accused the Musk to encourage negotiations and even encourage the Tesla Board to raise, not lower, prices for SolarCity.
The price is higher than Muntah Musk, which is the largest shareholder of SolarCity, with a bet of around 22%, and four members of the Tesla Board, who directly or indirectly have a stock of SolarCity, according to court records.
Board members settled the allegations against them last year with $ 60 million and did not recognize mistakes.
The Plaintiff also accused the agreement to benefit two cousins ​​of the Musk who founded SolarCity, saving companies that quickly reduce cash.
Musk said he was “fully reduced” from the negotiations of the council and shareholders chose to approve the agreement because it was the center of “his parent plan, part deux” which aims to integrate sustainable solar energy with sustainable self-driving cars.
He said that the plaintiff was seen as proof of control slightly more than strong management.
“Taken to natural conclusions, almost all ‘direct’ and ‘inspirational’ CEOs with minority share ownership will be considered controllers,” wrote the lawyer Musk in submission of the court.
If Representative Chancellor Chancellor Joseph determines the musk is the controlling shareholder, will fall into the Musk to prove the SolarCity agreement to meet the high standards of the “whole fair” standard, which examines the legal process.
Musk has noted in the court newspaper that SolarCity’s agreement has been a huge success for Tesla shareholders, showing the agreement is not only fair, but a gift.
After Tesla divided its stock 5-1 in 2020, it rose to $ 652 on Thursday from near $ 37 per share when the agreement was closed in November 2016.
“If the Chancellor’s representative thinks this agreement is terrible and not negotiated effectively on behalf of the company, he Will hit him, “said Larry Hamermesh, a professor at Delaware Law School.