Tesla Hit With Shareholder Lawsuits After SolarCity Buyout

A selection of Tesla shareholders are suing the electric automaker over its

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by Brad Anderson

September 21, 2016 at 14:53

A selection of Tesla shareholders are suing the electric automaker over its pending buyout of SolarCity.

Last month, Elon Musk confirmed that Tesla would spend $2.6 billion in buying SolarCity. However, four Tesla shareholders aren’t too pleased by the decision, particularly because Musk serves as the chairman of SolarCity and a number of other Tesla “insiders hold shares in both companies”, reports Bloomberg.

The lawsuits have been filed by the Arkansas Teacher Retirement System, the City of Riviera Beach Pension Fund and shareholders Ellen Prasinos and P. Evan Stephens. All want the automaker to stop the merger and pay damages to shareholders.

While Tesla says the deal shouldn’t be delayed as plantiffs could seek damages after the merger, one plantiff asserts that Tesla shareholders will suffer irreparable harm if the deal is completed by the fourth quarter of the year as expected.

Speaking with Bloomberg, professor at the Duke University School of Law, James Cox, said “It will be very difficult for the courts to blow this off. It’s a high-profile case, it’s a self-dealing case. This gets a much deeper look than most others would.”