- Tesla CEO Elon Musk headed back to court for a second day in a case revolving around his company's acquisition of SolarCity.
- Shareholders sued Musk, alleging that Tesla's acquisition of the solar installer amounted to a bailout.
- The shareholders also allege that Musk controlled the board of Tesla, even though he appeared to recuse himself from some deal negotiations concerning SolarCity.
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Elon Musk, chief executive officer of Tesla Inc., arrives at court during the SolarCity trial in Wilmington, Delaware, U.S., on Tuesday, July 13, 2021.Al Drago | Bloomberg | Getty Images
WILMINGTON, Del. — Tesla CEO Elon Musk wrapped up his testimony before the Delaware Court of Chancery on Tuesday afternoon, after spending around 9 hours defending his company's 2016 acquisition of SolarCity for $2.6 billion.
Shareholders sued Musk, alleging that Tesla's acquisition of the solar energy installer amounted to a bailout pushed through by Musk, who was chairman of the board at both businesses concurrently. The shareholders also allege that Musk controlled the board of Tesla, even though he appeared to recuse himself from some deal negotiations concerning SolarCity.
If Musk loses the lawsuit, he could have to pay upwards of $2 billion. In this case, known as a shareholder derivative action, the suit is filed by investors on behalf of a corporation, rather than the individuals or funds. If the plaintiffs win, proceeds may go to Tesla and not to the stakeholders who brought the suit.
Just after questioning began on Tuesday, plaintiffs' attorney Randy Baron tried to paint a picture of Musk repeatedly going behind the board's back to get a deal between the two companies started. Musk, meanwhile, insisted that all communication he had around the deal prior to board discussion was meant to provide a full picture.
"This is part of the board process, making sure the board has accurate information," Musk said, once again wearing a black suit, white button-down shirt and black tie.
Musk also denied Baron's claim that he set the price for Tesla to acquire the SolarCity. Baron pointed to notes taken by a financial advisor that showed Musk suggested the board offer $28.50 per share for the company. The board later settled on range of $26.50 to $28.50.