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Court upholds judge’s finding that Tesla acquisition of Solar City was fair
Legal Interview |
2023/06/06 10:09
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Delaware’s Supreme Court has upheld a judge’s decision in favor of Tesla CEO Elon Musk in a lawsuit challenging the electric car maker’s $2.4 billion acquisition of a solar panel company founded by two of his cousins.
The court on Tuesday rejected arguments from a group of Tesla shareholders that a Chancery Court judge erred in finding that Tesla’s deal to acquire SolarCity in 2016 was “entirely fair.” The judge made that determination even while finding that the process by which Tesla’s board of directors negotiated and recommended the deal to shareholders was “far from perfect.”
While noting errors in the trial court’s fair price analysis, and agreeing that the deal process was not “pitch perfect,” the justices said the record is replete with factual findings and credibility determinations indicating that the acquisition was “entirely fair.”
“We are convinced, after a thorough review of the extensive trial record, that the trial court’s decision is supported by the evidence and that the court committed no reversible error in applying the entire fairness test,” Justice Karen Valihura wrote in the court’s 106-page opinion.
Typically, under Delaware’s “business judgment” rule, courts give deference to a corporate board’s decision-making unless there is evidence that directors had conflicts or acted in bad faith. If a plaintiff can overcome the business judgment rule’s presumption because the deal involved a controlling shareholder or because directors might have been conflicted, the board’s action is subject to an “entire fairness” analysis. That shifts the burden to the corporation to show that the deal involved both fair dealing and fair price.
At the time of the acquisition, Musk owned about 22% of Tesla’s common stock and was the largest stockholder of SolarCity, as well as chairman of its board of directors.
The justices concluded that the findings by former Vice Chancellor Joseph Slights III, which were not challenged by the shareholders, support the conclusion that the overall deal process was the product of fair dealing. The Supreme Court also said that, while Slights failed to explain why and how he relied on Solar City’s stock price on the day the deal was announced, rather than the lower price on the day the deal closed, his fair price analysis did not amount to reversible error.
“The Court of Chancery, after examining all of the expert testimony and fair price evidence, found that the fair price case was not even close,” Valihiura noted.
An attorney for the shareholders argued in March that the Chancery Court judge put too much emphasis on the price Tesla paid for SolarCity, and not enough on the deal process, which the plaintiffs contend was tainted by the failure to appoint an independent committee to negotiate the deal. He also argued that the judge’s analysis of the deal price was flawed and that shareholders who voted to approve the deal were not properly informed, even though the vote was not required under Delaware law. |
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Military police enforce driving ban in snow-stricken Buffalo
Legal Interview |
2022/12/27 10:09
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State and military police were sent Tuesday to keep people off Buffalo’s snow-choked roads, and officials kept counting fatalities three days after western New York’s deadliest storm in at least two generations.
Amid some signs of progress — suburban roads reopened and emergency response service was restored — County Executive Mark Poloncarz warned that police would be stationed at entrances to Buffalo and at major intersections to enforce a ban on driving within New York’s second-most populous city.
“Too many people are ignoring the ban,” Poloncarz, a Democrat, said at a news conference.
The National Weather Service predicted that as much as 2 inches (2.5 to 5 centimeters) more snow could fall Tuesday in Erie County, which includes Buffalo and its 275,000 residents. County Emergency Services Commissioner Dan Neaverth Jr. said officials also were somewhat concerned about the potential for flooding later in the week, when the weather is projected to warm and start melting the snow.
The rest of the United States also was reeling from the ferocious winter storm, with at least an additional two dozen deaths reported in other parts of the country, and power outages in communities from Maine to Washington state.
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Court reinstates ban on lobster gear to protect right whales
Legal Interview |
2022/07/13 12:12
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A federal circuit court has reinstated a ban on lobster fishing gear in a nearly 1,000-square-mile area off New England to try to protect endangered whales.
The National Marine Fisheries Service issued new regulations last year that prohibited lobster fishing with vertical buoy lines in part of the fall and winter in the area, which is in federal waters off Maine’s coast. The ruling was intended to prevent North Atlantic right whales, which number less than 340, from becoming entangled in the lines.
The U.S. District Court for the District of Maine issued a preliminary injunction to halt enforcement of the rules. The U.S. Court of Appeals for the First Circuit in Boston vacated that ruling Tuesday.
The circuit court sent the case back to the district court level, but noted in its ruling that it does not think the lobster fishing groups that sued to stop the regulations are likely to succeed because Congress has clearly instructed the fisheries service to protect the whales.
“Although this does not mean the balance will always come out on the side of an endangered marine mammal, it does leave plaintiffs beating against the tide, with no more success than they had before,” the court ruled.
The ruling was the second by a federal court in favor of right whale protection in the past week. A U.S. District judge ruled last week that the federal government hasn’t done enough to protect the whales from entanglement in lobster fishing gear, which can be lethal, and new rules are needed to protect the species from extinction.
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High court allows bigger award in 1998 embassy bombing case
Legal Interview |
2020/05/11 12:37
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The Supreme Court is allowing a bigger award of money to victims of the 1998 bombings by al-Qaida of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. Despite the court’s ruling, however, it’s unlikely the victims will ever collect the full amount.
The nearly simultaneous truck bombings at the embassies killed 224 people and injured thousands. They were the first major attacks on U.S. targets by al-Qaida.
The case the Supreme Court ruled in involves lawsuits filed by victims and their families against Sudan that accused the country of causing the bombings by aiding al-Qaida and leader Osama bin Laden, who lived in Sudan in the 1990s.
The more than 500 people involved in the case are mostly foreign citizens, either U.S. government employees or contractors injured in the bombings or relatives of those who died. A court initially awarded the group more than $10 billion, but an appeals court threw out $4 billion of the award that was punitive damages. The Supreme Court unanimously vacated the appeals court's ruling Monday. |
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Cyprus court finds 19 year-old British woman guilty
Legal Interview |
2020/01/01 11:33
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Cyprus' attorney general said Tuesday he couldn't suspend the trial of a 19 year-old British woman found guilty of lying about being gang raped by as many as dozen Israelis because she had leveled “grave accusations” against police investigators that had to be adjudicated in court.
Costas Clerides said the woman's allegation that police coerced her into retracting her rape claim “could not have been left to linger” so he could not move to suspend the trial.
Clerides also said the woman's insistence that she didn't get a fair trial is “essentially a legal-constitutional matter" that a courtof law must rule on.
“Any intervention on the part of the attorney general, either for reasons of public interest or any other reasons, would have constituted nothing more than an obstacle to ascertaining the true facts of the case, as well as interference in the judiciary's work," Clerides said in a statement.
The woman, who hasn't been named was found guilty on Monday on a charge of public mischief and is due to be sentenced Jan. 7. The charge carries a maximum of a year in prison and a fine of 1,700 euros ($1, 907).
She insists that she was raped in a hotel room at a coastal resort town on July 17 and that she was forced to sign the retraction 10 days later while under police questioning. Her lawyers said they would appeal the decision, citing the judge's refusal to consider evidence that she had been raped. |
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