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Court upholds judge’s finding that Tesla acquisition of Solar City was fair
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2023/06/06 10:02
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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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Islamic scholar acquitted of rape by Swiss court
Headline Topics |
2023/05/24 09:44
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A Swiss court on Wednesday acquitted noted Islamic scholar Tariq Ramadan on charges of rape and “sexual constraint,” citing lack of material evidence more than a decade after the alleged actions, contradictory witness statements and what resembled love messages to the accused.
The court said it would pay Ramadan’s lawyers’ fees. It was a first victory for the former Oxford scholar with a worldwide reputation who had a brutal fall from grace with similar accusations still pending in France.
Ramadan faces potential trial in France over allegations by several other women that emerged more than five years ago.
Ramadan, a Swiss citizen, was jailed in February 2018 in France and handed preliminary rape charges over two alleged assaults in France, one in 2009 and another in 2012. A third woman filed a rape complaint against him in March. He was released on bail nine months later.
The outspoken scholar has consistently denied any wrongdoing and filed a lawsuit saying the allegations were false.
In the Swiss case, the court noted that it didn’t pass judgment on Ramadan’s sexual practices or his morality. A statement said the plaintiff’s accusations weren’t corroborated by any material elements, including traces of sperm or blood. It also considered the “the numerous internet exchanges” between the Swiss plaintiff and several people implicated in the French case were “of a nature to influence” what she and witnesses told the court.
The court said that messages the plaintiff exchanged with Ramadan immediately after the acts in question and for weeks later appear more like “messages of love and, above all, make no mention” of her allegations during a night at a hotel.
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German court: naked landlord doesn’t justify lower rent
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2023/04/26 16:46
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A German court said Wednesday that a landlord sunbathing naked in the courtyard of his building wasn’t a reason for his tenants to reduce their rental payments.
The case involved a building in an upmarket residential district of Frankfurt, which included an office floor, rented by a human resources company. The company withheld rent because it objected, among other things, to the landlord’s naked sunbathing. In response, the landlord sued.
The Frankfurt state court rejected the company’s reasoning, finding that “the usability of the rented property was not impaired by the plaintiff sunning himself naked in the courtyard.”
It said in a statement that it couldn’t see an “inadmissible, deliberately improper effect on the property.”
Judges were ruling on an appeal against a lower court decision that went in the landlord’s favor, and the tenant had only limited success overall. They found that the tenant had been entitled to reduce rental payments for three months only because of noisy construction work in the neighborhood.
The court said that the spot where the landlord sunbathed could only be seen from the rented office by leaning far out of the window.
It also said the tenant failed to prove that he took the stairs to the courtyard unclothed. “On the contrary, the plaintiff stated credibly that he always wore a bathrobe which he only took off just before the sun lounger,” it said. |
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Oregon launches abortion hotline offering free legal advice
Headline Topics |
2023/01/26 13:46
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Oregon is launching a new abortion hotline offering free legal advice to callers, moving to further defend abortion access after the U.S. Supreme Court overturned Roe v. Wade last summer and eliminated federal protections for the procedure.
The state’s Department of Justice announced the initiative Monday. It is modeled on similar hotlines launched by the attorneys general of New York and Delaware, as states where abortion remains legal have seen an increase in the number of patients traveling from areas where the procedure has been banned or restricted.
“The Hotline will fill an important need in our state for callers to understand the status of our reproductive health laws, including issues related to abortion access,” Oregon Attorney General Ellen Rosenblum said in a news release. “This is especially important because we share a border with Idaho, which has a near-total abortion ban.”
Abortion remains legal at all stages of pregnancy in Oregon, which has worked with California and Washington to promote the West Coast as a safe haven for the procedure.
People can call the anonymous hotline from any state for free legal advice and receive a call back from a lawyer within 48 hours.
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US trustee, media challenging secrecy in FTX bankruptcy
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2022/12/16 13:19
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Attorneys for the U.S. bankruptcy trustee in Delaware and several major media outlets are challenging an effort by cryptocurrency exchange FTX to withhold names of the company’s customers and creditors from the public.
At a brief hearing Friday, the judge presiding over the FTX bankruptcy granted a motion by media outlets to intervene for the purpose of objecting to the sealing of creditor information.
A separate objection by the U.S. trustee, the government watchdog that oversees Chapter 11 reorganizations, also was on the agenda for Friday’s hearing but was postponed by Judge John Dorsey until Jan. 11, when he likely will also hear arguments from the media.
In a court filing earlier this week, an attorney for Delaware’s acting U.S. trustee noted that “disclosure is a basic premise of bankruptcy law.”
“The debtors simply cannot seek bankruptcy protection and then do business behind a shield of secrecy” Juliet Sarkessian wrote. Sarkessian warned that allowing FTX to shield creditor lists and financial schedules would be a “slippery slope” and create an unfavorable precedent for bankruptcies in which creditors are also customers.
Last month, Dorsey temporarily granted a request by FTX to redact the names and addresses of clients and creditors from court filings, even though such information is typically public. The judge did direct FTX to file an unredacted creditor matrix under seal with the court, but the company has yet to do so.
Lawyers for FTX have argued that its customer list is both a valuable asset and confidential commercial information. They contend that secrecy is needed to protect FTX accounts from potential theft and to ensure that potential competitors do not “poach” FTX customers.
FTX also has sought to withhold the names and addresses of non-customer individual creditors who are citizens of the United Kingdom or European Union nations, citing a consumer protection program known as the General Data Protection Regulation, or GDPR.
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US woman who killed UK teen in crash gets suspended sentence
Headline Topics |
2022/12/10 14:35
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An American woman who left the U.K. after killing a teenager in a road accident was given an eight-month suspended prison sentence on Thursday, though she declined to come to Britain for the court hearing.
Anne Sacoolas, 45, was sentenced over an August 2019 accident in which 19-year-old Harry Dunn was killed when his motorcycle collided with a car outside RAF Croughton, an air base in eastern England that is used by U.S. forces. Sacoolas was driving on the wrong side of the road at the time.
Sacoolas and her husband, an American intelligence officer, returned to the U.S. days after the accident. The U.S. government invoked diplomatic immunity on her behalf, prompting an outcry in Britain and causing tensions between the governments in London and Washington.
Sacoolas admitted causing death by careless driving, which carries a maximum sentence of five years imprisonment. Justice Bobbie Cheema-Grubb said Sacoolas’ actions were “not far short of deliberately dangerous driving,” but she reduced the penalty because of Sacoolas’ guilty plea and previous good character.
The suspended sentence means that Sacoolas faces jail if she commits another offense within a year — though the judge acknowledged the sentence could not be enforced if she remains in the U.S.
The sentencing follows a three-year campaign by Dunn’s family, who met with politicians on both sides of the Atlantic in a campaign to get Sacoolas to face British justice. American authorities refused to extradite her.
Sacoolas entered a guilty plea in October, but the U.S. administration advised her not to come to Britain for sentencing. She attended the hearing at London’s Central Criminal Court by video link.
Lawyer Ben Cooper said Sacoolas had not asked for the diplomatic immunity asserted on her behalf by the U.S. government. He read a statement from Sacoolas in which she said she was “deeply sorry for the pain I have caused.”
“There isn’t a day that goes by that I don’t think about Harry,” the statement said.
The judge said the “calm and dignified persistence” of Dunn’s parents had led Sacoolas to acknowledge guilt and appear before the court.
Dunn’s mother Charlotte Charles said in a victim impact statement that her son’s death “haunts me every minute of every day and I’m not sure how I’m ever going to get over it.”
“As a family we are determined that his death will not have been in vain and we are involved in a number of projects to try to find some silver lining in this tragedy and to help others,” she said. “That will be Harry’s legacy.”
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Jackson, in dissent, issues first Supreme Court opinion
Headline Topics |
2022/11/07 13:07
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New Justice Ketanji Brown Jackson has issued her first Supreme Court opinion, a short dissent Monday in support of a death row inmate from Ohio.
Jackson wrote that she would have thrown out lower court rulings in the case of inmate Davel Chinn, whose lawyers argued that the state suppressed evidence that might have altered the outcome of his trial.
Jackson, in a two-page opinion, wrote that she would have ordered a new look at Chinn’s case “because his life is on the line and given the substantial likelihood that the suppressed records would have changed the outcome at trial.”
The evidence at issue indicated that a key witness against Chinn has an intellectual disability that might have affected his memory and ability to testify accurately, she wrote.
Prosecutors are required to turn over potentially exculpatory evidence to the defense. In this case, lower courts determined that the outcome would not have been affected if the witness’ records had been provided to Chinn’s lawyers.
Justice Sonia Sotomayor was the only other member of the court to join Jackson’s opinion. The two justices also were allies in dissent Monday in Sotomayor’s opinion that there was serious prosecutorial misconduct in the trial of a Louisiana man who was convicted of sex trafficking.
Jackson joined the high court on June 30, following the retirement of Justice Stephen Breyer, her onetime boss.
The court has yet to decide any of the cases argued in October or the first few days of this month. Jackson almost certainly will be writing a majority opinion in one of those cases.
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