In Re Tesla Motors, Inc. Stockholder Litigation

Summary

The Supreme Court of Delaware affirmed the Court of Chancery’s judgment that Tesla’s acquisition of SolarCity was entirely fair and that Elon Musk did not breach his fiduciary duties. Although the trial court erred in treating SolarCity’s unaffected stock price as part of its fair-price analysis, other evidence supported the conclusion that the transaction price was fair, and the court’s unchallenged factual and credibility findings supported its fair-dealing determination. The Court held that the absence of a special committee did not itself establish liability because Delaware law requires a fact-specific entire-fairness analysis rather than a per se rule.