In a brief telephonic hearing, a Delaware judge has approved the shareholder lawsuit settlement of a $60 million, challenging electric vehicle manufacturer Tesla Inc.'s acquisition of solar-panel installer SolarCity at $2 billion in 2016.
A Delaware judge has also approved $16.8 million in expenses and legal fees requested by the plaintiffs' attorneys. $16.8 million amount is roughly 28% of the 'derivative settlement,' which was decided on behalf of the firm, and the derived amount will be funded by insurers.
The settlement clarifies the claims against directors who were on the panel of Tesla as the board of members in 2016. However, the claims do not include co-founder and CEO Elon Musk. On March 2021 trial, Elon Musk was associated with acting as a lone defendant, but this meet has been postponed from March 2020 due to the outbreak of coronavirus.
The lawmakers claimed that Tesla Inc. directors had breached their lawful duties to shareholders by bowing to Elon Musk's wishes and requirements, agreeing to purchase the struggling of a solar energy company, which Elon Musk and his cousins had co-founded with dreams.
At the time of the acquisition deal, Elon Musk was the largest shareholder of SolarCity. The accuser argues that the agreement indirectly benefited Elon Musk and his cousins. Alongside this, the Tesla Inc. directors who were the owner of stakes in SolarCity.
The attorney team for Tesla officials has pointed out that the deal was approved by a majority of disinterested shareholders and also argued that the court should carry over to the business judgment of the company leadership team.
The accuser challenged that Elon Musk was a very conflicting stockholder and he also keeps a tight rein on stockholder, which the judge should, therefore, regulate if the deal reaches the requirement of the court's standard of 'entire fairness.'
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