Tesla’s entire Board of Directors, with the exception of CEO Elon Musk, has reportedly agreed to pay a $60 million settlement to resolve a shareholder lawsuit relating to the company’s purchase of SolarCity.
Bloomberg reports that all Tesla directors except CEO Elon Musk have agreed to a settlement of $60 million in order to resolve a shareholder lawsuit relating to the firm’s purchase of SolarCity. Shareholders accused Tesla of misleading investors into backing the $2 billion buyout of SolarCity in 2016. SolarCity was co-founded by Musk and his cousins, and he was the company’s largest shareholder.
It is expected that pension funds will press ahead with a trial set for March against Musk over his alleged failure to inform shareholders that SolarCity was in financial trouble at the time of the buyout in 2016. Currently, only four of Tesla’s nine directors are holdovers from when Tesla acquired SolarCity, Musk himself, his brother Kimbal Musk, and venture capitalists Ira Ehrenpreis and Steve Jurvetson.
Tesla officials defended the directors’ work in reviewing the SolarCity deal in recent court filings, alleging that “both the process and the price of this acquisition were inherently fair to Tesla’s stockholders.” However, critics of the deal have called the acquisition of SolarCity a bailout for the solar-panel firm.
In a pre-trial deposition, Musk stated that following issues integrating SolarCity with Tesla and the issues that the firm’s rooftop panel systems have caused including a number of fires at Walmart Inc. locations, he probably wouldn’t have made the same deal again.
“At the time I thought it made strategic sense for Tesla and SolarCity to combine. Hindsight is 20/20,” he said. “And if I could wind back the clock, you know, I would say I probably would have let SolarCity execute by itself; would have let Tesla execute by itself.”