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Tesla Investors Can Move Ahead With Solar City Deal Lawsuit




Tesla Inc. investors may forward with claims that billionaire founder

Tesla shareholders challenging the acquisition of SolarCity Corp.

Tesla shareholders challenge the acquisition of SolarCity Corp. produced by Delphare judge ruled Wednesday. Musk and other company directors, a Delaware judge ruled Wednesday.

Musk's electric car maker is facing a Crash in the wake of a fatal crash involving one of its Model X cars in California earlier this month. Tesla's shares have fallen on all but five days and the company loses its grip on General Motors Co. as the most valuable automaker. The stock declined 7.7 percent Wednesday to $ 257.78.

The crash, which is under investigation, adds to Musk's challenges, as well as concerns that the company does not reach its production targets for the all-important Model 3 sedan.

Tesla said he did not agree with the judge's decision in the investor's suit.

Pension funds that opposed the 201

6 SolarCity buyout accused Musk, who owns a 22 percent stake in Tesla, using his outsize influence and reputation to manipulate the shareholder vote over the buyout.

Questions about the Musk-led company's corporate governance.

The company's lawyers argued Musk can not be tagged as Tesla's controller given he owns a minority share and that he didn 'Tesla added two new independent directors. tcoer or trick investors in backing the SolarCity acquisition.

Musk's aura of being Tesla's "visionary" founder, CEO and board chairman, coupled with his ties to other directors, allowed him to exert enough influence over the SolarCity shareholder vote that it raised questions about its propriety, slights concluded.

The investors thus said that. "

Tesla investors gathered information that raises a" reasonable inference that Musk exercised his influence as a controlling stockholder "in connection with Solar City Deal, Slights conflicts "diminished the board's resistance to Musk's influence," the judge said.

The case is in Re Tesla Motors I nc Stockholders Litigation, No. 12711, Delaware Chancery Court (Wilmington).


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