Tesla CEO Elon Musk will testify about the electric vehicle maker’s $2.6 billion acquisition of solar panel company SolarCity in a shareholder lawsuit on Monday, the Associated Press reported.
What Happened: The lawsuit alleges that the acquisition failed to deliver the profits promised by Musk and amounted to a bailout of SolarCity after overlooking the struggling company’s fundamental weaknesses, as per the report. The lawsuit also accuses Musk of personally benefiting from the acquisition.
The Tesla CEO, who will be questioned under oath in a Delaware court, reportedly plans to defend the purchase as a justifiable acquisition.
Last August, other board members of Tesla — with the exception of Musk — settled with the shareholders for $60 million, with no admission of wrongdoing. Musk refused to settle and is now the sole remaining defendant.
Why It Matters: SolarCity was founded by Musk’s cousins Lyndon and Peter Rive, and Musk himself owned more than 20% of the company at the time of the deal.
If Musk loses the lawsuit, he will have to pay more than $2 billion from his personal wealth. Musk is the world’s second-richest person behind Amazon founder Jeff Bezos, with a total net worth of $180 billion, according to the Bloomberg’s Billionaires Index.
Musk is no stranger to lawsuits. The billionaire had to settle with the U.S. Securities and Exchange Commission in 2018 after tweeting that he would take Tesla private. The SEC charged Musk with committing securities fraud.
Tesla’s solar business, born out of its acquisition of SolarCity, has also been hit with lawsuits.
Price Action: Tesla shares closed 0.6% higher in Friday’s trading session at $656.95.
This story originally appeared on Benzinga. © 2021 Benzinga.com.
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