Tesla Investors Want Musk to Return $13 Billion for SolarCity Deal

Tesla shareholders asked a judge on Tuesday to order the company’s chief executive, Elon Musk, to pay the electric vehicle company $13 billion for coercing the board. company in a 2016 deal involving SolarCity.

“The question is whether the SolarCity acquisition was a bailout of financial difficulties orchestrated by Elon Musk,” said Randy Baron, a shareholder attorney.

The allegations echo points raised at a trial that took place in July, when Musk defended the deal.

The lawsuit by pension funds and asset managers alleges that Musk forced Tesla’s board to approve the deal for SolarCity, in which Musk was the main shareholder.

Musk responded that the deal was part of a decade-long plan to create a vertically integrated company that would transform energy generation and consumption with SolarCity’s roof panels and Tesla’s cars and batteries.

Evan Chesler, one of the attorneys representing Musk, told the hearing that the settlement was not a bailout and SolarCity was far from insolvent and its finances resembled many high-growth tech companies.

Shareholder attorney Lee Rudy has asked for the return of the Tesla shares that Musk received, which would be worth about $13 billion at its current price.

Musk said in court documents that such an award would be at least five times the largest amount ever recorded in a comparable shareholder suit.

Tesla bought SolarCity as the electric vehicle maker approached the launch of its Model 3, a market sedan that was central to its strategy. Shareholders claim the deal was an unnecessary distraction and saddled Tesla with SolarCity’s debt.

Shareholders claim that despite owning just 22% of Tesla, Musk was a controlling shareholder due to his ties to board members and domineering style.

Musk has repeatedly defended the SolarCity deal, saying the company needed to be acquired quickly or find financing to solve its dangerous cash shortage.