Tesla Inc. directors, with the notable exception of Chief Executive Officer Elon Musk, won court approval for a $60 million settlement of derivative claims by shareholders who say they were defrauded when the electric vehicle maker acquired another Musk-affiliated company, SolarCity, for $2 billion in 2016.
“It’s a substantial amount of money," Delaware Chancery Judge Joseph Slights III said Monday in approving the settlement, which will be paid by insurers. Sights also awarded lawyers for the shareholders $17 million in fees. Next March, billionaire Musk is slated to face investors’ claims he duped them into backing the $2 billion buyout of the solar-panel installer, which was co-founded by Musk and his cousins. Critics of the deal called it a bailout of SolarCity and questioned the robustness of Tesla’s corporate-governance provisions.Musk has said in court filings he’s eager to defend the SolarCity acquisition and dismissed shareholders’ lawyers as “barking up the wrong tree."
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“SolarCity would have done just fine by itself and Tesla would have done just fine by itself, but in the long-term, they are better together," he said in a pre-trial deposition made public last year. “And that is what the future will show. That is why I think you should stop wasting your time now."The case is In Re Tesla Motors Inc. Stockholders Litigation, No. 12711, Delaware Chancery Court (Wilmington).
This story has been published from a wire agency feed without modifications to the text.