Elon Musk’s trial regarding Tesla’s 2018 acquisition of SolarCity in Wilmington, Delaware, took an interesting turn today. One attorney vomited in the jury box, and Musk’s brother Kimbal took the stand for questioning on Wednesday.
The trial was brought to a temporary halt for two hours as one attorney, who was seated in the jury box, vomited, the Independent reported. After a routine cleanup by janitorial staff at the Delaware courtroom, the trial finally resumed, and Wednesday brought Kimbal Musk to the stand. Kimbal, a Tesla board member and a businessman in the food sector, said he was not aware of Elon’s activities regarding the SolarCity acquisition.
“I was unaware of my brother’s activities,” Kimbal said to Judge Joseph Slights. The trial is attempting to solve the question of whether Elon pressured Tesla board members to acquire SolarCity, a solar panel manufacturer that was founded by cousins of the Musk family. At the time, Elon held a 22% stake in both Tesla and SolarCity. Still, the Tesla CEO maintains that he did not allow himself from voting on the potential acquisition as he was the largest shareholder of both companies at the time of the vote. Musk reportedly “urged a speedup of due-diligence review of the deal in mid-2016 even as advisors at Evercore Partners wanted to dig deeper into a cash crunch at the maker of solar roof panels,” the Bloomberg report indicates.
Kimbal added later that he was unaware that Evercore advisors and some bankers were surprised to see SolarCity struggling with cash flow. The company was in danger of triggering default provisions if its cash reserves sunk below $116 million. Kimbal said he didn’t think it was “a lot of money” but realized “cash in the bank is what matters” when it comes to provisions.
“Were you aware that while Evercore wanted to slow down the diligence review, your brother was pushing to speed things up,” Lee Rudy, a lawyer for the shareholders, asked. “I was not aware of that,” Kimbal replied. However, after his successful career as a businessman that has included many acquisitions and mergers, Kimbal said he doesn’t consider bankers’ opinions to be of significant value. “I avoid them whenever I can. Bankers are involved to make a deal happen. I don’t put much stock in what they have to say.”
Shareholders of Tesla stock feel that the acquisition was unfair and may have been a bailout plan for SolarCity founders Lyndon and Peter Rive, cousins of both Elon and Kimbal. The shareholders who brought the trial on believe that Musk might have applied unfair pressure to the Tesla board. Musk denies these claims and said he had “no material role” in the decision to acquire SolarCity.
Elon Musk makes opening remarks in SolarCity trial, defends Tesla’s $2.6B acquisition
Elon Musk has sparred with opposing lawyer Randy Baron since the beginning of the trial. The Tesla CEO has called Baron “a bad human being” and has called his questions “deceptive.”
The trial is expected to go on for two weeks, according to Judge Slights. Slights will then deliberate and come to a verdict on his own.
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