The lawyers of the shareholder who obtained the cancellation of the enormous compensation plan granted in 2018 by Tesla to Elon Musk asked a Delaware court on Friday evening for the payment of legal fees which would total nearly 6 billion dollars.
Total Share Value Claimed Reaches $5.96 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 won case at the end of last January to 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,” acknowledge 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.
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.
When contacted by AFP, these law firms and Tesla did not immediately respond. 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 Elon’s 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.