Elon Musk will take the stand on Monday in a court in Delaware, where some Tesla shareholders have sued to try to get Musk to repay the $2.6 billion Tesla spent on acquiring SolarCity in 2016 from Musk’s cousins. SolarCity, of course, has been an unmitigated disaster.
The Court of Chancery in Wilmington, Delaware, will conduct a two-week trial starting Monday, beginning with Musk’s testimony. The central question, according to Reuters, is whether Musk is the “controlling stockholder” of Tesla, a question which you might think is obvious — he definitely acts like he is — but which is not because Elon only held around 22 percent of Tesla’s stock when the SolarCity deal was consummated.
The union pension funds and asset managers leading the case want Musk to repay to Tesla the cost of the $2.6 billion deal and to disgorge the profits on his SolarCity stock. If they win, it would be one of the largest judgments against an individual.
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“I think it’s going to be very hard for the court to ignore the reality that Elon Musk is Elon Musk and his relationship with Tesla,” said Ann Lipton, a professor at Tulane University Law School.
She said the case might present an unusual situation given Musk’s celebrity status, his personal ties to Tesla board members and those board members’ financial ties to SolarCity.
SolarCity was founded by two of Elon’s cousins, Lyndon and Peter Rive. The trial was supposed to happen last March, but was delayed because of the pandemic. The case has already had plenty of spice. Here is Musk and a lawyer battling it out in a deposition:
It is expected that that lawyer, Randy Baron, will question Musk Monday. For the record, I also routinely ask my friends if they drive gasoline cars and if they say yes I sniff and replay, “How embarrassing.”
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