Tesla CEO Elon Musk will testify about the electric automobile maker’s $2.six billion acquisition of photo voltaic panel business SolarCity in a shareholder lawsuit on Monday, the Linked Push noted.
What Took place: The lawsuit alleges that the acquisition failed to provide the profits promised by Musk and amounted to a bailout of SolarCity just after overlooking the struggling company’s fundamental weaknesses, as per the report. The lawsuit also accuses Musk of individually benefiting from the acquisition.
The Tesla CEO, who will be questioned below oath in a Delaware court docket, reportedly programs to protect the acquire as a justifiable acquisition.
Last August, other board customers of Tesla — with the exception of Musk — settled with the shareholders for $sixty million, with no admission of wrongdoing. Musk refused to settle and is now the sole remaining defendant.
Why It Issues: SolarCity was founded by Musk’s cousins Lyndon and Peter Rive, and Musk himself owned additional than 20% of the business at the time of the deal.
If Musk loses the lawsuit, he will have to pay out additional than $2 billion from his personal wealth. Musk is the world’s 2nd-richest individual behind Amazon founder Jeff Bezos, with a whole web truly worth of $180 billion, in accordance to the Bloomberg’s Billionaires Index.
Musk is no stranger to lawsuits. The billionaire experienced to settle with the U.S. Securities and Exchange Commission in 2018 just after tweeting that he would get Tesla personal. The SEC charged Musk with committing securities fraud.
Tesla’s photo voltaic organization, born out of its acquisition of SolarCity, has also been strike with lawsuits.
Price tag Action: Tesla shares shut .six% larger in Friday’s buying and selling session at $656.95.
This tale initially appeared on Benzinga. © 2021 Benzinga.com.
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