New York:
Tesla chief Elon Musk is anticipated in court this week to defend the electric automobile maker’s controversial 2016 acquisition of SolarCity, in a shareholder trial that starts Monday.
A group of Tesla shareholders contends that the multibillionaire, who was chairman of each Tesla and SolarCity at the time of the transaction, “poisoned” Tesla’s capability to pretty evaluate the obtain, wasting corporate assets in the $2.6 billion deal and harming shareholders, according to a complaint.
The case will be heard and ruled on by a judge in a Delaware court.
Musk is anticipated to testify in the course of the two-week trial as early as Monday, US media reported.
The group of investors, which consists of union pension funds and other institutional investors, argues that SolarCity was a failing enterprise that faced “likely bankruptcy” had been it not for the actions of Musk and other Tesla board members, who also had huge equity stakes in SolarCity.
The plaintiffs contend Tesla’s board breached their fiduciary duty to Tesla shareholders. They are searching for unspecified monetary relief in the complaint.
Plaintiffs have currently reached a $60 million settlement with other Tesla directors initially named in the complaint, with the payment coming from insurance coverage. This group, which integrated Kimbal Musk, Elon Musk’s brother, did not admit fault.
Concerning the case Tesla mentioned in a securities filing that “we believe that claims challenging the SolarCity acquisition are without merit and intend to defend against them vigorously.”
Musk contends that the SolarCity deal made Tesla the “world’s only vertically integrated sustainable energy company.”
(This story has not been edited by TheSpuzz employees and is auto-generated from a syndicated feed.)