A group of shareholders want a judge to find that Musk coerced the company's board to acquire SolarCity in 2016 in order to bail out the failing solar company he was the top shareholder in. The shareholders asked that Musk be ordered to return the stock he received from the deal and pay $13 billion.
The all-stock deal was worth more than $2 billion at the time, but the stock price of the company has gone up a lot since then.
In July of 2021, Musk testified in a 10-day lawsuit over the acquisition of SolarCity, with his lawyers saying that the CEO was removed from board discussions and negotiations due to the approval of 85% of shareholders. The resounding question is whether or not Musk and other board members concealed information relating to the transaction from shareholders.
Randy Baron, an attorney for shareholders, said at the hearing that the acquisition of SolarCity was a rescue from financial distress, orchestrated by Musk.
SolarCity had accumulated over $3 billion in debt in its 10-year history and was burning through cash at an unsustainable rate, according to a lawsuit by union pension funds and asset managers.
In July, Musk's attorney argued that the acquisition was part of the CEO's long-term vision to transform the company into an energy company. The CEO said that combining SolarCity andTesla was the key to his vision of combining Powerwall with its solar roof panels.
Evan Chesler, one of Musk's lawyers, said at the hearing on Tuesday that the deal was not a bail out and that SolarCity's finances were on par with many high-growth tech companies.
They were building billions of dollars of long-term value.
Lee Rudy, a shareholder attorney, asked the Vice Chancellor of Delaware's Court of Chancery to consider the contempt Musk held for the deposition and trial process, in which he insulted shareholder attorneys.
He expects to rule in three months and retire around the same time. The shareholder lawsuit challenging Musk's huge pay package was transferred to another judge.
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