Tesla (TSLA) Says Four Suits Filed Challenging Proposed SolarCity (SCTY) Merger
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Litigation Relating to the Merger
Between September 1, 2016 and September 14, 2016, four lawsuits were filed in the Court of Chancery of the State of Delaware by purported stockholders of Tesla challenging the proposed Merger. These lawsuits are captioned as City of Riviera Beach Police Pension Fund v. Elon Musk, et al., C.A, No. 12711-VCS; Ellen Prasinos v. Elon Musk, et al., C.A. No. 12723-VCS; Arkansas Teacher Retirement System, et al. v. Elon Musk, et al., C.A. No. 12740-VCS; and P. Evan Stephens v. Elon Musk, et al., C.A. No. 1275-VCS (collectively, the “Actions”). Each of the Actions names as defendants the members of the Tesla Board, and certain of the Actions also name as defendants Merger Sub, SolarCity, and certain members of the SolarCity Board. The Actions seek to assert claims derivatively on behalf of Tesla, alleging, among other things, that the members of the Tesla Board breached their fiduciary duties in connection with the proposed Merger and, in some cases, that SolarCity and members of the SolarCity Board aided and abetted breaches of fiduciary duties and that certain individual defendants would be unjustly enriched by the proposed Merger. Certain of the Actions also assert putative class action claims against the members of the Tesla Board, including on the ground that the preliminary joint proxy statement/prospectus filed on August 31, 2016 allegedly failed to disclose material facts in connection with the proposed Merger. The Actions seek, among other relief, damages in an unspecified amount, rescission of the proposed Merger, and attorneys’ fees and costs. On September 8, 2016, the plaintiff in the Prasinos action filed a motion for a preliminary injunction to prevent Tesla from consummating the Merger or any vote thereon and a motion for expedited proceedings. On September 16, 2016, the Court set a schedule for consolidation of the Actions and determination of a plaintiffs’ leadership structure, and the Court scheduled a hearing for October 18, 2016, to consider any motion for expedited proceedings. Tesla believes that the Actions are without merit.
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Create E-mail Alert Related CategoriesCorporate News, Litigation, Mergers and Acquisitions
Related EntitiesTesla, Definitive Agreement
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