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The responsible judge sided with Musk in a ruling on Wednesday (local time) and found that Tesla did not pay an excessive price for SolarCity. The plaintiffs accused Musk of pushing through the deal at the expense of Tesla shareholders in order to save what they believed to be the de facto bankrupt company at the time.
Tesla bought SolarCity for around $2.6 billion in 2016. At the time, critics accused Musk of conflicts of interest because he was both the largest shareholder and chairman of the board at SolarCity. In addition, there were suspicions of nepotism from the start, since the company was run by a cousin of Musk and Tesla co-founder JB Straubel was also on the board of directors. Both companies were regularly in the red at the time. At the time of the deal, SolarCity was considered to be in financial distress.
The judge agreed with the plaintiff shareholders that Musk had exerted too much influence on the takeover and, given his personal involvement, had not withdrawn enough from the negotiations. However, he concluded that this was ultimately not a decisive factor for the transaction. It remains to be seen, however, whether Musk will be able to close the case. A lawyer for the plaintiffs told US media that he was reviewing options to appeal the verdict.
NASDAQ-listed Tesla shares fell 0.45 percent to $877.51.
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Image Credits: SolarCity, Corp., Scott Olson/Getty Images