Four lawsuits, filed between September 1 and 14, are challenging the merger between Tesla Motors Inc (NASDAQ:TSLA) and SolarCity (NASDAQ:SCTY), seeking damages, rescission of the deal and attorneys’ fees and costs.
Tesla said in a Monday filing that the transaction, the equity value of which is estimated at USD 2.6 billion (EUR 2.3bn), may be delayed or prevented if any of these cases is not resolved. The electric vehicles maker believes the lawsuits are without merit.
The plaintiffs include City of Riviera Beach Police Pension Fund, Ellen Prasinos, Arkansas Teacher Retirement System and P. Evan Stephens. They filed suits with the Court of Chancery of the State of Delaware, alleging that members of the Tesla Board breached their fiduciary duties in connection with the deal and, in some cases, that SolarCity and members of the latter’s Board aided and assisted breaches of fiduciary duties.
In addition, plaintiffs claim that certain individual defendants would be unjustly enriched by the merger. There are also putative class action claims against the members of the Tesla Board, including on the ground that the preliminary joint proxy statement/prospectus from August 31 allegedly failed to disclose material facts linked to the deal.
On September 8, the plaintiff in the Prasinos lawsuit filed a motion for a preliminary injunction to prevent Tesla from consummating the merger or any vote thereon and a motion for expedited proceedings.
A hearing to consider expedited proceedings motions has been scheduled for October 18. The Court has also set a schedule for consolidation of the lawsuits and determination of a plaintiffs’ leadership structure, Tesla said.
(USD 1 = EUR 0.894)
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