Elon Musk is heading to court to defend Tesla's acquisition of his cousins' solar panel company. If he loses, it could cost him $2 billion.
Elon Muskis due to appear in court on July 12 to defend Tesla's acquisition of solar-panel company SolarCity.
- Tesla acquired SolarCity, which was owned by Musk's cousins, in 2016.
- Tesla shareholders filed a suit in 2017 accusing Musk and Tesla's board of effectively bailing out SolarCity.
Elon Musk is due to head to court in Delaware on July 12 to defend Tesla's acquisition of solar panel company SolarCity in 2016 against angry Tesla shareholders.
The lawsuit was originally filed in 2017 by a group of Tesla shareholders who claimed the acquisition amounted to a bailout of SolarCity, which was founded and run by Musk's cousins, Lyndon Rive and Peter Rive. Musk and the rest of the Tesla board, including Musk's brother Kimbal Musk, benefitted from the deal "at the expense of Tesla and its minority stockholders," the suit said.
Musk had a 22% stake in SolarCity and was its chairman.
In an email to Insider, the plaintiffs' lawyer Randall Baron said the full damages sought by the suit amount to between $2.2 and $2.6 billion, although if found liable, Musk could end up paying less than that. "Ultimately, if the court finds liability, it will be up to the judge to determine how to calculate those damages," Baron said.
The suit claimed SolarCity "consistently failed to turn a profit, had mounting debt, and was burning through cash at an unsustainable rate." It said SolarCity was $3 billion in debt at the time of the acquisition.
Tesla did not respond to Insider when contacted for comment.
After the acquisition, SolarCity became Tesla's solar power division Tesla Energy. Tesla Energy solar panel owners told Insider earlier this year that customer service deteriorated after Tesla took over.
Do you work at Tesla Energy? Contact this reporter from a non-work email address at firstname.lastname@example.org or email@example.com.
- Instagram's crisis highlights the bigger issues the entire ad industry is facing
- The 10-year Treasury yield will drop to 3.5% by the end of next year as the massive bond rally will continue, UBS says
- Exit polls predict BJP advantage in MP, Rajasthan, Congress win in Chhattisgarh, Telangana and tight contest in Mizoram
- International air travel penetration remains low in India: CAPA
- "Meeting friends is always a delight": PM Modi reacts to 'Melodi' selfie shared by Italian counterpart Georgia Meloni
- WhatsApp testing new feature that lets you search users by their username
- Delhi airport: Flights diverted due to bad smog, bad weather
- Meta expanding child safety measures as scrutiny mounts