Elon Musk Said To Have Clinched Victory In SolarCity Takeover Shareholder Lawsuit

Tesla Inc (NASDAQ: TSLA) CEO Elon Musk has clinched a legal victory over a shareholder lawsuit related to the SolarCity Corp takeover, The Wall Street Journal reported on Wednesday, citing a court ruling.

What Happened: A Delaware court judge ruled the billionaire entrepreneur did not act unlawfully in the electric-vehicle maker’s roughly $2.1 billion takeover of SolarCity in 2016. 

Vice Chancellor Joseph Slights III, who presided over the shareholder lawsuit in Delaware Chancery Court wrote that the acquisition had both “flaws and redeeming qualities," according to the Journal.

“The linchpin of this case, though, is that Elon proved that the price Tesla paid for SolarCity was fair—and a patently fair price ultimately carries the day,” the report said, citing Vice Chancellor Slights.

The lawsuit brought by Tesla’s shareholders alleged that the acquisition amounted to a bailout of SolarCity and Musk personally benefited from the acquisition.

Musk had in testimony said he had not dictated the deal process or its price and recused himself from the shareholder vote. 

See Also: Tesla Will Have To Pay Just One-Ninth Of The $137M Claim In Racism Lawsuit

Why It Matters: Musk's cousins Lyndon and Peter Rive founded SolarCity. The billionaire entrepreneur himself owned more than 20% of the company at the time of the deal.

Other board members of Tesla — except Musk — settled with the shareholders for $60 million in August 2020, with no admission of wrongdoing. Musk refused to settle and is now the sole remaining defendant.

Price Action: Tesla shares closed almost 4.4% higher in Monday’s trading at $685.70.