Elon Musk Spars With Lawyer in Court, Calling Him 'Deceptive' Amid Questioning
Tesla CEO Elon Musk pushed back again in court on Tuesday against a lawsuit that alleges he is responsible for engineering his company's 2016 acquisition of a financially unstable company, SolarCity, which was at the center of conflicts of interest and failed to yield profits Musk promised.
In the second day of testimony, Musk went up against the plaintiff's attorney, Randall Baron, who gave Musk the third degree regarding his role in facilitating the SolarCity agreement.
"Your questions," the billionaire CEO complained from the witness stand, "are so deceptive."
Baron and Musk also butted heads over the meaning of the word cabal, which Baron used to describe the Tesla team that provided daily updates in July 2016 about the SolarCity deal.
For more reporting from the Associated Press, continue below.
When Musk objected that cabal sounded sinister, Baron countered that it typically meant a group of people working together toward a common purpose.
"Usually not in a good way," Musk muttered.
Rejecting any notion that he pressed Tesla's board to pursue a takeover of SolarCity, Musk, who is well-known for his commanding management style, insisted he had "no material role" in Tesla's board discussions about the deal.
Under questioning by Baron, Musk acknowledged that he had recommended an acquisition price of $28.50 a share. But he said this figure merely reflected what he called a standard practice of offering a 30 percent premium on a target company's average stock price over the previous four weeks.
The board ultimately decided to offer $26.50 to $28.50 a share. Musk observed that his suggestion was "discarded by the board in favor of a lower price" and quipped, "They don't listen to me, obviously.″
The long-running shareholder lawsuit asserts that Musk, who was SolarCity's largest stakeholder and its chairman, and other Tesla directors breached their fiduciary duties in bowing to Musk's wishes and agreeing to buy the company. In what the plaintiffs call a clear conflict of interest, SolarCity had been founded by Musk and two of his cousins, Lyndon and Peter Rive.
Baron has sought to establish that Musk has sought to run Tesla without interference and therefore bears responsibility for any failures.
The trial, which began Monday, marks the culmination of seven shareholder lawsuits, consolidated into one, that alleged that Tesla directors breached their fiduciary duties in bowing to Musk's wishes and agreeing to buy SolarCity. Last August, a judge approved a $60 million settlement that resolved claims made against all the directors on Tesla's board except Musk without any admission of fault. That left Musk, who refused to settle, as the sole remaining defendant.
Even if the trial ends with Musk having to pay personally for the whole SolarCity deal, $2.5 billion won't much hurt the world's third-wealthiest person. Forbes magazine has estimated that Musk is worth roughly $163 billion.
