The coronavirus outbreak in the United States has forced the postponement of an expected defence of a $2.2-billion deal in court by Elon Musk which was scheduled to begin on Monday.
No new date for the trail has been set.
This case is related to the acquisition of SolarCity in 2016 by Tesla and critics and shareholders of Tesla of the deal alleged that the deal benefited Musk more than it did to Tesla while the electric car maker had to pay the money. According to analysts the outcome of the case would depend not only on the facts and merits of the case but also one the temperament of the Tesla chief executive.
Two sides of Musk’s have been evident in recent times during proceedings in court - one that is indicates a polite and respectful side while the other is one that is evasive and taunting.
In the present case which is to be held at a Delaware court, the leader on corporate issues in the United States, Musk is pitted against the union pension funds and asset managers who have criticized Musk of misleading the company and the shareholders on the possible benefits to be derived from the SolarCity deal in 2016 that carried a value of $2.2-billion.
If the case does not hold good for Musk, he could stand to lose more than $1-billion.
“If you seem arrogant in court, you may be signing your own economic death warrant,” said John Coffee, a securities professor at Columbia Law School.
This can be costly for Musk particularly since the case is being heard in the Delaware’s Court of Chancery that has its roots in medieval England and known for its decorum.
There were no comments available on the issue from Musk.
For Musk, not following the established corporate norms is nothing new. He has a cult-like following among the general population unlike most CEOs, goes head on with short-sellers and does not refrain from showing disdain for “boring bonehead questions” from analysts.
According to the charges leveled against Musk in the Delaware case, it has been claimed that the purchase of SolarCity, a company that makes rooftop solar panels, was done at such a time when the company was on the verge of bankruptcy and the financial health of the company was kept a secret, claimed shareholders participating in the case. According to the case, shareholders have alleged that the deal had not been beneficial for Tesla at all while being so for Musk because he was the largest shareholder of SolarCity, the cousins of Musk who had co-founded the company and some of the directors of Tesla who owned states in the solar panel making company.
The respondents in the case have demanded that the 2.2 million shares of Tesla that Musk had come to own because of the deal be surrendered by him. As on Thursday, the value of the shares was about $1.2-billion.
(Source:www.theglobeandmail.com)
No new date for the trail has been set.
This case is related to the acquisition of SolarCity in 2016 by Tesla and critics and shareholders of Tesla of the deal alleged that the deal benefited Musk more than it did to Tesla while the electric car maker had to pay the money. According to analysts the outcome of the case would depend not only on the facts and merits of the case but also one the temperament of the Tesla chief executive.
Two sides of Musk’s have been evident in recent times during proceedings in court - one that is indicates a polite and respectful side while the other is one that is evasive and taunting.
In the present case which is to be held at a Delaware court, the leader on corporate issues in the United States, Musk is pitted against the union pension funds and asset managers who have criticized Musk of misleading the company and the shareholders on the possible benefits to be derived from the SolarCity deal in 2016 that carried a value of $2.2-billion.
If the case does not hold good for Musk, he could stand to lose more than $1-billion.
“If you seem arrogant in court, you may be signing your own economic death warrant,” said John Coffee, a securities professor at Columbia Law School.
This can be costly for Musk particularly since the case is being heard in the Delaware’s Court of Chancery that has its roots in medieval England and known for its decorum.
There were no comments available on the issue from Musk.
For Musk, not following the established corporate norms is nothing new. He has a cult-like following among the general population unlike most CEOs, goes head on with short-sellers and does not refrain from showing disdain for “boring bonehead questions” from analysts.
According to the charges leveled against Musk in the Delaware case, it has been claimed that the purchase of SolarCity, a company that makes rooftop solar panels, was done at such a time when the company was on the verge of bankruptcy and the financial health of the company was kept a secret, claimed shareholders participating in the case. According to the case, shareholders have alleged that the deal had not been beneficial for Tesla at all while being so for Musk because he was the largest shareholder of SolarCity, the cousins of Musk who had co-founded the company and some of the directors of Tesla who owned states in the solar panel making company.
The respondents in the case have demanded that the 2.2 million shares of Tesla that Musk had come to own because of the deal be surrendered by him. As on Thursday, the value of the shares was about $1.2-billion.
(Source:www.theglobeandmail.com)
