In re Tesla Motors Stockholder Litig.

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June 6, 2023
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cash flow, disclosure, entire fairness, merger, overpayment, insolvency, liquidity, standard of review, solar energy, shareholders, covenant, trial court

In re Tesla Motors Stockholder Litig.
2023 Del. LEXIS 178
US
State Court
Delaware
Supreme Court
Daniel R. Fischel; Ronald Quintero; Murray Beach; Jeurgen Moessner; Dan Reicher; Jonathan Foster; Frederick Van Zijl
Seitz, Valihura, Vaughn, Traynor, Wallace (en banc)

Summary

At issue was a 2016 acquisition of Solar City Corp. by Tesla. Some Tesla shareholders claimed that Musk caused Tesla to overpay for Solar through his alleged domination and control of Tesla’s board. The primary focus of the shareholders was that Solar was insolvent at the time of the acquisition. The court applied the “entire fairness” standard. The Court of Chancery found the acquisition to be “entirely fair.” The Delaware Supreme Court affirmed the Court of Chancery decision.
In re Tesla Motors Stockholder Litig.
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See Also

Delaware Supreme Court Upholds ‘Entire Fairness’ of a Tesla Acquisition

At issue was a 2016 acquisition of Solar City Corp. by Tesla. Some Tesla shareholders claimed that Musk caused Tesla to overpay for Solar through his alleged domination and control of Tesla’s board. The primary focus of the shareholders was that Solar was insolvent at the time of the acquisition. The court applied the “entire fairness” standard. The Court of Chancery found the acquisition to be “entirely fair.” The Delaware Supreme Court affirmed the Court of Chancery decision.