Elon Musk is expected to defend a $2.2 billion transaction in the courtroom next week criticized by shareholders as benefiting Musk at the cost of Tesla, and the outcome may rely as much on the CEO’s temperament as on the facts of the case.
The electric automobile manufacturer’s unconventional chief executive has shown two aspects in recent courtroom proceedings — one polite and respectful, the other evasive and taunting.
It remains to be seen which Musk will show up Monday at a Delaware court, the country’s leader on corporate issues, when he squares off against union pension funds and asset managers who claim they had been deceived about the benefits of Tesla buying SolarCity in 2016 for $2.2 billion.
This may be notably true in Delaware’s Court of Chancery, with roots in medieval England and known for its decency.
Smashing corporate norms has come to define Musk, who has a cult-like following for his ambitious vision, fights with short-sellers and disdain for “dull bonehead questions” from analysts.
In the Delaware case, shareholders claim SolarCity, a rooftop solar energy firm, was secretly on the edge of bankruptcy when Tesla bought it. They contend the transaction benefited Musk, SolarCity’s largest shareholder, his cousins who co-founded the agency, and Tesla directors who owned stakes in SolarCity.
Traders want Musk to give up the 2.2 million stakes of Tesla he received in the transaction, which on Thursday had been worth about $1.2 billion.