Elon Musk noted both victory and loss in separate court decisions on Wednesday, as one judge cleared the billionaire for illegal actions related to the acquisition of SolarCity by Tesla for $ 2.6 billion, while another refused to cancel an agreement with regulators because of the claim to have “secured financing” to take the private car manufacturer.
Decisions on Musk’s previous deals come amid a busy week for Tesla’s chief executive, whose $ 44 billion Twitter offer was accepted by the board on the social media platform on Monday.
SolarCity’s decision stems from a lawsuit filed by Tesla shareholders against the company’s board to acquire all of the carmaker’s shares in 2016 from the then-financially troubled solar company, where Musk was a major investor. Shareholders say Musk, who chaired Tesla’s board at the time, was heavily armed with his other directors to approve the acquisition.
The case has been closely monitored by legal observers, as the shareholders who filed the lawsuit say Musk effectively controls Tesla’s board, even though he owns only one-fifth of the company’s stock.
The other members of Tesla’s board had earlier settled the $ 60 million case, leaving Musk to fend for himself. Last summer, he testified fervently in a courtroom in Wilmington, Delaware, defending his vision of creating an integrated clean energy company and rejecting the need to acquire all the shares as bailout for another part of his empire.
Joseph Slices, vice chancellor of the Delaware Chancellery, credited the story in favor of Musk, writing in his ruling Wednesday that while the process on board Tesla “to negotiate and ultimately recommend the acquisition is far from perfect.” . . . the predominance of evidence reveals that Tesla paid a fair price. “
The deal “marked a vital step forward for a company [Tesla] which for years has made it clear to the market and its shareholders that it intends to expand from an electric car manufacturer to an alternative energy company, ”the judge wrote.
“The court ruling acknowledges that there are shortcomings in the deal approval process and a high degree of involvement from a conflicting fiduciary,” said Randall Barron, a lawyer representing the losing shareholders, who said they were considering their next steps.
The “secured financing” lawsuit was filed by the US Securities and Exchange Commission against Musk over a failed deal. The regulator accused Musk of fraud in August 2018, telling his 22 million Twitter followers that they had provided funding to make Tesla private at $ 420 a share.
Musk eventually settled by agreeing to pay a $ 20 million fine and resign as chairman of Tesla. The agreement also forced the billionaire to get pre-approval for all written communications to Tesla, including Twitter, the social media platform that is now private in a $ 44 billion deal.
Musk also agreed that he would not deny the allegations in the complaint or hint that it was without factual basis.
The SEC later called on Musk last November after he asked Twitter users if he should sell part of his stake in Tesla, the decision said, to determine if he had asked for their approval. In March, Musk asked the court to overturn parts of the subpoena and suspend the consent order, saying the regulator did not have the authority to issue the request and said the subpoena had been issued in bad faith.
U.S. District Judge Lewis Lyman rejected Wednesday’s request: “Musk cannot now seek to withdraw the agreement he deliberately and voluntarily, simply complaining that he felt he had to agree to it in time, but now – after the ghost of the lawsuit is a distant memory and his company has become, in his opinion, almost invincible – wishes he did not have.
Musk did not immediately return a request for comment on the decision.
The SEC’s case against Musk has been a headache for the world’s richest man for years, as the regulator pressured him to submit documents detailing whether certain tweets had been pre-approved.
Musk has repeatedly clashed with the SEC and earlier this week called his San Francisco office “shameless puppets on Wall Street”, claiming in a series of tweets that he was conspiring with “short-selling sharks” to attack Tesla and ” they do nothing to protect the actual shareholders. “
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