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After their victory against Elon Musk, lawyers demand $6 billion in Tesla shares

2024-03-02T16:04:47.084Z

Highlights: After their victory against Elon Musk, lawyers demand $6 billion in Tesla shares. The three firms having obtained the cancellation of the billionaire's remuneration plan are asking that their legal costs be paid in shares of the car manufacturer. This would place them together among the ten largest shareholders of the group. "The size of the requested reward is important because the value of the profit obtained by Tesla thanks to the action of the plaintiff's counsel was massive", insist the lawyers of this shareholder.


The three firms having obtained the cancellation of the billionaire's remuneration plan are asking that their legal costs be paid in shares of the car manufacturer, which would place them together among the ten largest shareholders of the group.


All work merits salary.

A well-understood saying from the shareholder's lawyers who obtained the cancellation of the enormous compensation plan granted in 2018 by Tesla to Elon Musk.

They asked a Delaware court Friday evening for legal fees that would total nearly $6 billion.

According to documents filed with a court in this state, where the Tesla company is legally registered, and which AFP was able to consult, the three law firms requested that their legal costs in the case won at the end of January be paid to them in shares of the car manufacturer, a particularly rare request.

The firms are requesting, on the one hand, reimbursement of costs incurred, which they estimate at $1.12 million, and, on the other hand, the sale of 29.4 million Tesla shares, which were listed at $202.64 per share at Wall Street's close on Friday.

The total value of the shares claimed thus reached $5.96 billion at Friday's price.

They were worth $5.6 billion at the date of the Delaware court's decision at the end of January.

This would represent a little less than 1% of Tesla's total capital, but would place the firms, together, among the ten largest shareholders in the group.

“We recognize that the request is unprecedented in terms of its importance

,” recognize the applicants in the documents sent to the Delaware court, but this situation is primarily due to the fact, according to them, that

“(their) efforts have produced a huge benefit to the company

.

When contacted by AFP, these law firms and Tesla did not immediately respond.

Elon Musk, a billionaire entrepreneur of South African origin, was forced to return Tesla shares worth a total of $56 billion after Judge Kathaleen McCormick overturned his compensation plan after the action in justice led by one of Tesla's shareholders, Richard Tornetta, who considered this remuneration excessive.

Therefore,

"the size of the requested reward is important because the value of the profit obtained by Tesla thanks to the action of the plaintiff's counsel was massive"

, insist the lawyers of this shareholder.

Also read: Russia, immigration, “cancel culture”: Elon Musk’s political crusades

Judge McCormick considered that the shareholders had received

“erroneous”

and

“misleading”

information about the board of directors and the remuneration committee, ahead of the general meeting during which the Elon remuneration plan Musk had been approved.

According to the complainant, the South African entrepreneur had dictated his terms to directors who, given their relationships with him or their personal interests, were not sufficiently independent to oppose them.

In response, the billionaire asked Tesla shareholders to vote in favor of transferring the company's registration from Delaware to Texas.

Source: lefigaro

All business articles on 2024-03-02

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