Elon Musk, chairman and chief executive officer of Tesla Motors, speaks during an event at the company’s headquarters in Palo Alto, California, on Wednesday, Oct. 14, 2015. Photo: David Paul Morris.
The Delaware Court of Chancery on Wednesday allowed an investor lawsuit against Elon Musk and Tesla Motors Inc. to proceed, finding there is reason to believe Musk controlled the Tesla board when the company paid $2.6 billion to acquire a debt-saddled firm that he helped to found.
In a “close call,” Vice Chancellor Joseph R. Slights III sided with a class of investors who argued Musk used his influence as a controlling stockholder to lock a conflicted board of Tesla directors into accepting what amounted to a bailout for Musk’s SolarCity Corp. in 2016.
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