Yesterday, Tesla¡¯s shareholders had reportedly urged a judge to ask their CEO Elon Musk to return all his?Tesla shares to the electric vehicle company, which at present are worth a whopping?$13 billion.
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As per the investors, Elon Musk coerced the company's board into a 2016 deal for SolarCity.
The lawsuit by union pension funds and asset managers reportedly alleges that Elon Musk strong-armed the Tesla board into approving the deal for the cash-strapped SolarCity, in which Musk was the top shareholder.
In the Zoom hearing, Randy Baron, an attorney for the 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."?
The closing arguments in the court recounted key findings from a previous 10-day trial in July, when Elon Musk had spent two days on the stand defending the deal.
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Elon Musk has countered that the SolarCity deal was part of a decade-old master plan to create a vertically integrated company which would transform energy generation and consumption, through SolarCity's roof panels and Tesla's cars and batteries.
Evan Chesler, one of the lawyers representing Elon Musk, told the court that the deal was not a bailout and SolarCity was far from insolvent, and the company¡¯s finances resembled many high-growth tech companies.
He also said SolarCity was building billions of dollars of long-term value.
Done in 2016, the all-stock deal was valued at $2.6 billion. And since that time, Tesla's stock has soared higher and higher.
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Shareholder attorney Lee Rudy yesterday urged the Vice Chancellor Joseph Slights of Delaware's Court of Chancery to order Elon Musk to return the Tesla stock he received, which would be worth close to a whopping $13 billion at its current price.
As per the court papers, Musk mentioned that such an award would be at least 5 times the largest award ever in a comparable shareholder lawsuit, and further called it a "windfall" for plaintiffs.
Replying to this, Lee Rudy said "It would be a windfall for Elon Musk if he got to keep shares he never should have gotten in the first place."
Chesler, one of Musk¡¯s lawyers, called the request to order Elon Musk to return the almost $13 billion worth of stock from the deal "preposterous", and stated that it ignored the 5 years of unprecedented success at Tesla.
Even as per Vanessa Lavely, an attorney of the Tesla CEO "Without Elon Musk, Tesla might not exist let alone have a $1 trillion value. That doesn't make him a controller. That makes him a highly effective CEO."
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Vice Chancellor Joseph Slights ended the hearing by saying he expects to rule in about three months. He also said last week that he intends to retire in the coming months and a related shareholder lawsuit challenging Musk's record pay package was transferred from Slights to another judge.
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