Cecil Whig

Musk clashes again with opposing lawyer in SolarCity lawsuit

- By PAUL WISEMAN

AP Business Writer

WILMINGTON, DEL. (AP) — Testifying for a second day, CEO Elon Musk pushed back again Tuesday against a lawsuit that blames him for engineerin­g Tesla’s 2016 acquisitio­n of a financiall­y precarious company called SolarCity that was marred by conflicts of interest and never generated the profits Musk insisted it would.

And for a second day, a pugnacious Musk sparred with Randall Baron, the plaintiffs’ attorney who has been grilling him about his role in orchestrat­ing the SolarCity deal.

“Your questions,” the billionair­e CEO complained from the witness stand, “are so deceptive.”

Witness and lawyer clashed down to the meaning of the word “cabal,” which Baron invoked to characteri­ze the Tesla team that was updating Musk daily in July 2016 in the progress toward a SolarCity deal. When Musk objected that “cabal” sounded sinister, Baron countered that it typically meant a group of people working together toward a common purpose.

“Usually not in a good way,” Musk muttered.

Rejecting any notion that he pressed Tesla’s board to pursue a takeover of SolarCity, Musk, who is wellknown for his commanding management style, insisted he had “no material role’’ in Tesla’s board discussion­s about the deal.

Under questionin­g by Baron, Musk acknowledg­ed that he had recommende­d an acquisitio­n price of $28.50 a share. But he said this figure merely reflected what he called a standard practice of offering a 30% premium on a target company’s average stock price over the previous four weeks.

The board ultimately decided to offer $26.50 to $28.50 a share. Musk observed that his suggestion was “discarded by the board in favor of a lower price’’ and quipped, “They don’t listen to me, obviously.’’

The long-running shareholde­r lawsuit asserts that Musk, who was SolarCity’s largest stakeholde­r and its chairman, and other Tesla directors breached their fiduciary duties in bowing to Musk’s wishes and agreeing to buy the company. In what the plaintif fs call a clear conflict of interest, SolarCity had been founded by Musk and two of his cousins, Lyndon and Peter Rive.

Baron has sought to establish that Musk has sought to run Tesla without interferen­ce and therefore bears responsibi­lity for any failures.

The trial, which began Monday, marks the culminatio­n of seven shareholde­r lawsuits, consolidat­ed into one, that alleged that Tesla directors breached their fiduciary duties in bowing to Musk’s wishes and agreeing to buy SolarCity. Last August, a judge approved a $60 million settlement that resolved claims made against all the directors on Tesla’s board except Musk without any admission of fault. That left Musk, who refused to settle, as the sole remaining defendant.

Even if the trial ends with Musk having to pay personally for the whole SolarCity deal, $2.5 billion won’t much hurt the world’s thirdwealt­hiest person. Forbes magazine has estimated that Musk is worth roughly $163 billion.

 ?? MATT ROURKE ?? Elon Musk arrives at the justice center in Wilmington, Del., Tuesday, July 13, 2021. Musk took to a witness stand Monday to defend his company’s 2016 acquisitio­n of a troubled company called SolarCity against a shareholde­r lawsuit that claims he’s to blame for a deal that was rife with conflicts of interest and never delivered the profits he had promised. (AP Photo/ Matt Rourke)
MATT ROURKE Elon Musk arrives at the justice center in Wilmington, Del., Tuesday, July 13, 2021. Musk took to a witness stand Monday to defend his company’s 2016 acquisitio­n of a troubled company called SolarCity against a shareholde­r lawsuit that claims he’s to blame for a deal that was rife with conflicts of interest and never delivered the profits he had promised. (AP Photo/ Matt Rourke)

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