On October 10, 2016, the Delaware Court of Chancery appointed Kessler Topaz as co-lead counsel in an action brought on behalf of Telsa Motors, Inc. and a class of its stockholders challenging Tesla’s acquisition of SolarCity Corporation in an all-stock transaction valued at approximately $2.6 billion.
Tesla’s Chairman, Chief Executive Officer and largest stockholder, Elon Musk, is also the largest stockholder of SolarCity, which was founded and is run by his cousins. The acquisition is rife with conflicts and Kessler Topaz believes that Tesla is substantially overpaying for SolarCity. The action, captioned In re Tesla Motors, Inc. Stockholder Litigation, C.A. No. 12711-VCS, alleges that Tesla’s Board of Directors breached its fiduciary duties owed to Tesla and its stockholders by approving the acquisition and that certain of its directors, including Elon Musk, will be unjustly enriched as a result.