Tesla Inc. Chief Executive Elon Musk didn’t act unlawfully when the electric-vehicle maker bought SolarCity Corp. for roughly $2.1 billion, a Delaware judge ruled Wednesday.
A group of Tesla shareholders had alleged that Musk controlled the takeover while having a financial interest in both companies, that many of its directors were conflicted and that Tesla overpaid for SolarCity. Musk has said he didn’t dictate the deal process or price and recused himself from the shareholder vote.
Vice Chancellor Joseph Slights III, who presided over the shareholder lawsuit in Delaware Chancery Court, found that Tesla’s negotiation process was imperfect and Musk too involved, but the board nevertheless meaningfully vetted the deal.
“[T]he Acquisition process, like most worldly things, had both flaws and redeeming qualities. The linchpin of this case, though, is that Elon proved that the price Tesla paid for SolarCity was fair — and a patently fair price ultimately carries the day,” Vice Chancellor Slights wrote.
Lee Rudy, an attorney for the shareholders, said the plaintiffs were considering their options. An attorney for Musk didn’t immediately respond to a request for comment.
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