Shareholders took Tesla to court in 2016 for improperly valuing the SolarCity deal, providing flawed analysis and misleading investors, among other things. New progress in the case has seen the unsealing of some court documents which show why a number of large Tesla investors, including some pension funds, believe its $2.6 billion acquisition of SolarCity in 2016 never should have happened.
The documents are an opening brief in a shareholders’ lawsuit against Tesla over the acquisition but were previously heavily redacted. Legal transparency advocates PlainSite published a fuller version of the documents on Monday.
Tesla said in a statement to CNBC, “These allegations are based on the claims of plaintiff’s lawyers looking for a payday, and are not representative of our shareholders who support our mission and ultimately voted in favor of the acquisition.”
“The accusations made in the plaintiff’s brief are false and misleading, as Tesla and SolarCity published all material information in its proxy and other public filings for all shareholders to consider before deciding on the transaction,” the company said. “Providing clean, renewable energy generation through solar has been a critical part of our mission ever since 2006, and our acquisition of SolarCity has enabled and continues to enable a significantly faster path to achieve our goals.”
The documents claim that “Prior to the Acquisition, Musk described Tesla, SolarCity, and SpaceX as a ‘pyramid’ atop which he sat; it was ‘important that there not be some sort of house of cards that crumbles if one element of the pyramid . . . falters.'”
Those documents were partially unsealed at the request of lawyers for the stockholders who are suing Tesla. PlainSite has filed a motion to unseal even more material.