Shareholders of Elon Musk's Tesla urged the court to order the CEO to recoup $13 billion after Tesla had acquired SolarCity in 2016. The lawsuit is examining two solid arguments questioning whether the merger with SolarCity was a bailout and unfair to shareholders. Firstly, SolarCity was facing financial difficulties that could lead to its insolvency. Secondly, Elon Musk was the company’s top shareholder. The all-stock deal was estimated at $2.5 billion in 2016 but Tesla’s stock has soared since then and the deal’s worth is more than $13 billion at stock’s current price. Shareholders claim that Elon Musk “strong-armed the Tesla board into approving the deal for the cash-strapped SolarCity, in which Musk was the top shareholder.” "This case has always been about whether the acquisition of SolarCity was a rescue from financial distress, a bailout, orchestrated by Elon Musk," Randy Baron, an attorney for shareholders, said. One of Musk’s lawyers said that the deal was not a bailout and SolarCity was far from being bankrupt. At the same time, Tesla's CEO confirmed in a courtroom that the deal was a part of his master plan to integrate technological solutions of both companies. In 2016, Musk owned 22% of Tesla and SolarCity stock. Notably, the latter company was established by his relatives.
