Tesla
Musk finds himself accused of leveraging his position to force the acquisition of SolarCity, which investors have cast as financially troubled, and in no way a sound purchase for the carmaker. Further complicating matters in the case are Musk's ties to SolarCity, including his stake in the company.
Musk, who was largely confrontational with the plaintiffs' lawyer throughout the hearing, denied that he had used his position as CEO to force the acquisition while denying that the firm had been suffering financial difficulties. Musk's testimony was also notable for a personal attack against the Plaintiff's lawyer, with the CEO calling him a "bad human being" that had been "mentored by criminals, then continued to be mentored by criminals," in response to a previously recorded deposition where the CEO had similarly insulted the lawyer.
Theatrics aside, however, there are undoubtedly many intriguing aspects of the case, especially from a business perspective. A prominent element of the plaintiffs' case is the allegation of SolarCity's poor financial health. To this end, the plaintiffs revealed the previous failure of a bank to acquire capital for the firm due to unreceptive investors. Musk would counter, stating that the firm simply "didn't have the time" to obtain capital.
A second major element of the plaintiffs' case is the allegation that Musk had deliberately withheld the actual state of SolarCity's financial situation from shareholders, and going behind the board to arrange the deal without its input. Musk, on the contrary, has asserted that all information that could be provided to the board had been.
If the plaintiffs can convince the court of these arguments, Musk will have to pay the worth of the deal back to the company.
- https://www.wsj.com/articles/elon-musk-takes-stand-in-court-to-defend-purchase-of-solarcity-11626098958
- https://www.cnbc.com/2021/07/13/elon-musk-testifies-for-second-day-in-solarcity-trial.html
- https://www.nasdaq.com/articles/musk-set-to-take-stand-for-second-day-in-trial-over-solarcity-deal-2021-07-13