Tesla Inc Chief Executive Elon Musk urged investors to approve the 2016 purchase...
) Chief Executive Elon Musk urged investors to approve the 2016 purchase of SolarCity at a big premium to its market value despite knowing the solar installer faced a cash crunch and publicly stating he had recused himself from involvement in the deal, according to court documents unsealed on Monday.
Defendants asked the Delaware Court of Chancery judge to dismiss the case before it heads to a trial in March. Shareholder lawsuits that survive a motion to dismiss often settle before trial, which in this case might involve a payment to shareholders by Musk as well as money from directors’ insurance.
According to the filing, Musk was informed at a SolarCity board meeting in October 2015 that SolarCity needed to raise up to $300 million and was slashing its solar installation forecast for the year. The company issued $113 million in convertible notes a month later, of which Musk bought $10 million.
The board ultimately approved an exchange ratio that represented a share price of $26.50 to $28.50 a share, though the offer was lowered later prior to the deal closing.
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