The Directors of Tesla settled a shareholders’ lawsuit over the company’s acquisition of SolarCity for $2.6 billion in 2016.
Its CEO Elon Musk becomes the only defendant in the litigation, in which shareholders alleged that Tesla improperly valued SolarCity and paid a substantial amount even if it is insolvent and worthless.
Shareholders also accused Tesla of misleading investors by providing flawed analysis about the solar energy company. They also claimed that Musk breached his fiduciary duties and enriched himself by pushing to acquire the solar energy company.
Musk was the Chairman and largest shareholder of SolarCity. His cousins Lyndon Rive and Peter Rive were the CEO and CTO at the time of the acquisition.
According to court documents, Tesla shareholders settled the lawsuit for $60 million, which was paid from insurance policies. The company’s five current directors Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Stephen Jurvetson, and Kimbal Musk was part of the settlement. It also covered Bard Buss, who served as a director when Tesla bought SolarCity.
