Live Updates: Elon Musk Testifies Over Solar City Acquisition

Live Updates: Elon Musk Testifies Over Solar City Acquisition

We will be updating this post with Musk’s testimony as the day progresses:

1142 EST: Elon Musk says he “doesn’t want to be CEO” and “hates being a boss”, according to TOPLive, per BBG. “To be honest, I don’t want to be the boss of anything,” BBG reports him as saying.

1141 EST: The judge has had to warn Musk to “listen to Baron’s questions closely and answer them directly without wandering in his responses,” per BBG.

1100 EST: As of the “first break of the morning”, Delaware reporter Isabel Hughes writes that “Musk has spent a lot of time arguing the pandemic is to blame for poor solar performance” and that Musk has told the plaintiff’s attorney that his questions are “tricky and deceptive”. “Musk has thus far taken the opportunity to elaborate on every yes-or-no question. Also has told [plaintiff’s attorney] Baron several times he’s just wrong,” Hughes writes.

1052 EST: Jef Feeley, legal reporter, writes that “Musk is getting more combative under questioning from Baron,” per BBG.

1039 EST: Peter Jeffrey, legal editor, writes that Musk has now interrupted once or twice to push back, and Baron has warned him it’s going to go really slow if he keeps that up. “Some of your questions are tricky and deceptive,” Musk tells the lawyer, with whom he tangled in his 2019 deposition, to explain why he feels the need to clarify, per BBG.

1030 EST: “Plaintiffs’ attorney Randy Baron started his questioning of Musk by playing clips of Musk saying in prior depositions that the lawsuit was “wasting everyone’s time,” and that the next few quarters would vindicate the SolarCity deal. The next few quarters, we now know, did not.” WaPo’s Will Oremus writes on Twitter. 

1019 EST: Plaintiff lawyer Randy Baron gives Musk “fair warning” that “we have a long way to go,” probably all day today and into tomorrow, BBG writes. 

0900 EST: Delaware reporter Isabel Hughes shows up to court and says one spectator in the gallery showed up to the trial because “how often do you get to see Elon lie?”

*  *  *

Social media is also enjoying the show:

LOL pic.twitter.com/jciKv18BDK

— TC (@TESLAcharts) July 12, 2021

Combative Musk is my favorite Musk pic.twitter.com/I2LQyXlNFQ

— TC (@TESLAcharts) July 12, 2021

Today is that day that Elon Musk is testifying in Wilmington, DE about Tesla’s bailout buyout of Solar City. Musk’s goal through testifying will be to try and show a judge that he does not control the company, which would absolve him accusations that he was unilaterally pulling the strings when Tesla bought the solar company, usurping the board and normal corporate governance.

Hanging in the balance is the question of whether or not Tesla was damaged as a result of the merger and, if so, if Elon Musk was the responsible party. As the Wall Street Journal noted today:

“If Vice Chancellor Joseph Slights III, the presiding judge, finds Mr. Musk didn’t control the deal, the case is likely over for the plaintiffs, Mr. Hamermesh said. Case law in Delaware generally defers to the business judgment of independent and properly motivated directors. On the other hand, if the evidence points to control, the court would assess whether the deal process and price were fair and, if not, whether Mr. Musk should be ordered to pay money back to Tesla, Mr. Hamermesh said.”

Musk is the first witness in the trial, which comes after shareholders have accused him of carelessly using shareholder funds to bailout his cousin, who was CEO of Solar City at the time.

Tesla has argued that the company’s shareholders “overwhelmingly voted” to approve the bailout, according to FT. Ann Lipton, law professor at Tulane University in New Orleans told FT: “The case has the potential to provide more guidance not only to courts, but also to deal planners, as to the factors courts are likely to take into account when determining whether someone is a controller.”

Delaware Court of Chancery vice-chancellor Joseph Slights wrote in 2018 that “it is reasonably conceivable that Musk, as a controlling stockholder, controlled the Tesla board in connection with the acquisition” and that “there were practically no steps taken to separate Musk from the board’s consideration of the acquisition”.

 

Tyler Durden
Mon, 07/12/2021 – 11:45

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