Tesla’s shareholders have urged a judge to find that CEO Elon Musk coerced the company’s board to acquire SolarCity in 2016, a transaction that a group of shareholders allege was a “bailout” of the failing solar company of which Musk was the top shareholder. During a Zoom hearing on Tuesday, the shareholders asked that Musk be ordered to return the stock he received from the deal and pay Tesla $13 billion.
The all-stock deal was valued at $2.6 billion at the time, but Tesla stock has gone up massively since then.
In July 2021, Musk testified in a 10-day lawsuit over the acquisition, with his lawyers saying the CEO recused himself from board discussions and negotiations relating to the acquisition of SolarCity, a purchase that was approved by 85% of shareholders at the time. The resounding question is whether or not Musk exerted undue influence over the transaction and whether he and other board members concealed information relating to the transaction from shareholders.
“This case has always been about whether the acquisition of SolarCity was a rescue from financial distress, a bailout, orchestrated by Elon Musk,” said Randy Baron, an attorney for shareholders, at the hearing, Reuters reported.