Shareholder lawsuits threaten Tesla’s US$2.6 billion SolarCity deal

September 20, 2016
LinkedIn
Twitter
Reddit
Facebook
Email

Tesla Motors’ US$2.6 billion purchase of SolarCity has come under attack from shareholders as four lawsuits were filed in the first weeks of September alleging the company’s board members have breached their fiduciary duties.

According to a regulatory filing with the US Securities and Exchange Commission, the lawsuits are brought by a police pension fund, a teachers’ retirement group, and two individuals, and variously name certain members of the SolarCity board as defendants as well.

“In some cases, 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,” it said.

Tesla dismissed the allegations in the filing, but noted litigation may yet delay, or even derail, the proposed merger, which is scheduled to complete before the end of the year. “Tesla believes that the Actions are without merit,” it said in the filing. It said in a press statement, however, the litigation is unlikely to succeed, or hold up the SolarCity arrangement.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

Not ready to commit yet?
  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

A hearing is scheduled for 18 October.

Tesla posted its thirteenth consecutive quarterly reverse in the quarter ended 30 June, shedding US$293.2 million in the period, equivalent to US$2.09 per share. Its revenues finished at US$1.27 billion, up 33% on the same period of the previous year. Nevertheless, Elon Musk, the biggest shareholder in both Tesla and SolarCity, reckons the SolarCity deal could create a US$1 trillion company.

Meanwhile, SolarCity has continued to slash its guidance for the year, with shares trading nearly a third down on Tesla’s valuation in August.

Read Next

October 29, 2025
Hecate Grid, via a letter to the New York State Public Service Commission (NYPSC) has cancelled its 650MW Swiftsure battery energy storage system (BESS) in Staten Island, New York.
October 29, 2025
Propwr, a division of ProPetro, has secured a long-term power supply contract to commit 60MW of energy to support a hyperscaler data centre operator in the Midwest region of the US.
October 28, 2025
Tesla reported record energy storage deployments and business segment profits in Q3 2025, just ahead of a shareholder vote on CEO Elon Musk’s historic remuneration package.  
October 28, 2025
AEMO has reported a record 56.6GW of new generation and storage capacity in the National Electricity Market (NEM) development pipeline.
October 24, 2025
Energy Vault has acquired a 150MW battery energy storage system (BESS) in Texas. Meanwhile, Jupiter Power has entered an agreement with Austin Energy to provide 100MW of electricity from a BESS facility.

Most Popular

Email Newsletter