Tesla approached SolarCity with the proposition of acquiring it for $2.6 billion, but it could be delayed due to ongoing troubles. On Monday, the EV firm revealed that Tesla shareholders have filed lawsuits against the acquisition, reports Reuters.
Four lawsuits against SolarCity deal
Four shareholders have filed their own lawsuits against the automaker over the imminent buyout. In the lawsuits, Tesla’s board members have been accused of breaching fiduciary duty, as revealed in an SEC filing.
“Between Sept. 1, 2016 and Sept. 14, 2016, four lawsuits were filed in the Court of Chancery of the State of Delaware by purported stockholders of Tesla challenging the Merger,” the SEC filing reads.
Exclusive: Izzy Englander’s Millennium Management Focuses On Longer Term Capital
Earlier this month, Greylock Capital Associates, an emerging markets hedge fund, filed for bankruptcy protection in New York assets under management dwindled from nearly $1 billion in 2017 to $450 million at the end of 2020. After three years of losses, Bloomberg reported that assets could drop below $100 million by the end of the Read More
The City of Riviera Beach Police Pension Fund, shareholder P. Evan Stephens, the Arkansas Teacher Retirement System and shareholder Ellen Prasinos are the four parties that have filed lawsuits against the automaker.
Tesla’s Chairman and CEO Elon Musk is very closely associated with SolarCity’s management as he serves as its chairman. The plaintiffs allege that for this reason, it is impossible for Tesla to be objective when it comes to purchasing the energy services provider. Additionally, the filing notes that two more SolarCity board members hold board memberships and executive positions in the EV firm, and hence, the four plaintiffs are concerned.
Prasinos is seeking an injunction to halt the acquisition. The deal could possibly be delayed beyond the end of 2016, which was the anticipated closure date, if any of the four plaintiffs is granted an injunction by the court, says TechTimes. The hearing is scheduled to take place in Delaware on October 18.
Tesla asserted in the regulatory filing that there is no merit to the allegations made in the lawsuit and believes that the shareholders will not be able to get the transaction deferred.
Tesla fixes Model S vulnerabilities
In other Tesla news, Chinese security researchers uncovered vulnerabilities that allowed them to remotely attack a Model S sedan, but the automaker has rolled out a security patch to fix the vulnerabilities. On Tuesday, the EV firm told Reuters that the bugs responsible for the issue have been patched. A day earlier, cyber-security researchers with China’s Tencent Holdings disclosed their findings in a blog.
Fiat Chrysler had to recall 1.4 million U.S. vehicles last year after two researchers uncovered on-board software bugs. Since then, interest in car hacking has surged. The researchers demonstrated that they were able to gain remote control of a Jeep traveling at high speeds in a dramatic video posted on Wired.com.