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Court upholds judge’s finding that Tesla acquisition of Solar City was fair
Court Watch |
2023/06/06 10:03
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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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Delaware Senate confirms two Supreme Court nominees
Court Watch |
2023/05/04 17:22
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The state Senate has confirmed Gov. John Carney’s two nominees for the Delaware Supreme Court, including a lawyer tapped by Carney for the high court after he was arrested for drunken driving.
Carney’s nominations of Abigail LeGrow and N. Christopher Griffiths were confirmed Wednesday with no support from Senate Republicans. Despite Griffiths’ DUI arrest in January, GOP lawmakers were primarily outraged that, for the first time in decades, there will be no resident of Kent County on the state’s highest court.
“The governor of this great state threw us under the bus,” said Sen. Eric Buckson, a Kent County Republican.
Senate Minority Whip Brian Pettyjohn of Georgetown described Carney’s decision to forego nominating a justice from central Delaware as “insulting.”
Last week, members of the Democrat-controlled House unanimously passed a bipartisan bill mandating that the five-member Supreme Court include at least one justice from central Kent County, one from southern Sussex County, and two from northern New Castle County. The state Senate declined to take up the bill before voting on Carney’s nominees. Two Dover-area Democratic senators who cosponsored the bill, Trey Paradee and Kyra Hoffner, voted Wednesday to confirm Carney’s picks.
“Judge LeGrow and Chris have the experience, knowledge, and commitment to public service necessary to serve on the Supreme Court,” Carney said in a statement issued after they were confirmed.
Before the Senate vote, Pettyjohn questioned Griffiths during a Senate Executive Committee hearing about the traffic stop that led to his arrest, but Griffiths offered few details.
“The bottom line is this, I had too much to drink, and I should not have drove,” said Griffiths, who said he complied with the trooper who stopped him.
Griffiths, who will be the first black man to serve on the Supreme Court, also indicated that he feared that the trooper, whom he nevertheless described as “a complete gentleman,” might physically abuse him because of his race.
“I’m a black man driving around in lower Delaware at a mostly white beach, and I want to go home to my family,” Griffiths said. “There’s a lot of things in the national news that are burned in our minds and our hearts, and I wanted that officer to know “we’re on the same team.’”
“I have images in my brain from the biases I bring to that situation of, man, I want to make sure I go home tonight. I want to make sure there’s not a knee in my back but that I go home alive,” Griffiths added.
Griffiths pleaded guilty in March to reckless driving that was alcohol-related, an offense he compared to “a simple traffic ticket.” He was fined and ordered to complete an education course for those charged with driving under the influence.
LeGrow and Griffiths replace Tamika R. Montgomery-Reeves, who now sits on a federal appeals court, and Justice James T. Vaughn Jr., a Kent County resident who retired effective this week.
LeGrow has served as Superior Court judge since February 2016. She previously served as a Master in Chancery on the Delaware Court of Chancery. LeGrow received her law degree from the Pennsylvania State University. Griffiths has been a partner at the Wilmington law firm of Connolly Gallagher, which also employs Democratic state Sen. Kyle Evans Gay. He previously was a wealth manager for Wilmington Trust Company and the Vanguard Group. Griffiths, who received his law degree from Villanova University, is the son of Norman Griffiths, a retired DuPont attorney who served 20 years on the Wilmington City Council. |
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Court rules documents in Sanford case must be unsealed
Court Watch |
2023/04/07 18:22
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The South Dakota Supreme Court ruled Thursday that affidavits from an investigation into child pornography allegations against billionaire philanthropist T. Denny Sanford must be unsealed.
In 2019, South Dakota investigators searched his email account, as well as his cellular and internet service providers, for evidence of possession of child pornography, after his accounts were flagged by a technology firm.
Sanford, the state’s richest man, was not charged after the South Dakota attorney general’s office said its investigation into the allegations found no prosecutable offenses within the state’s jurisdiction.
Sanford had sought to bar affidavits used to issue search warrants in the case. But the Sioux Falls Argus Leader and ProPublica argued in court that the documents should be made public.
After the decision not to file charges, Judge James Power ordered in June 2022 that South Dakota law required the affidavits to be unsealed. They were kept sealed while Sanford’s attorneys appealed, sending the case to the state Supreme Court. |
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Man granted new trial in 2006 triple murder freed after plea
Court Watch |
2022/11/21 10:22
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An man granted a new trial in the murders of three men in Ohio more than a decade and a half ago has been released after reaching a plea agreement with prosecutors.
Stoney Thompson, 43, was originally sentenced in Lucas County to three consecutive life terms in the October 2006 slayings of Todd Archambeau, 44, Kenneth Nicholson, 41, and Michael York, 44, who were found shot and stabbed in a boarded-up house in Toledo.
Thompson, originally convicted of complicity to commit murder, was resentenced on involuntary manslaughter convictions under the plea agreement, The (Toledo) Blade reported. He submitted an Alford plea, in which a defendant does not acknowledge guilt but concedes that prosecutors have sufficient evidence for conviction.
Judge James Bates sentenced Thompson to six years for each involuntary manslaughter count to be served consecutively for a total of 18 years. The judge allowed his release but ordered him to remain on probation for the remaining two years of the sentence.
The Sixth U.S. District Court of Appeals in July had ordered a new trial for Thompson, citing evidence not turned over to the defense by prosecutors that included other potential suspects, recorded testimony of other parties, and a photo of a bloody shoe print that didn’t match Thompson’s own shoes. Thompson’s brother, Goldy, was acquitted in the same case following a separate trial in which the evidence hadn’t been withheld, the newspaper reported.
The appeals court judges also cited a lack of physical evidence tying the defendant to the crimes and noted as “strange” the jury’s decision to acquit Thompson of firearms specifications in each death, given that the victims were all shot and one died of a gunshot wound.
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Jackson, in dissent, issues first Supreme Court opinion
Court Watch |
2022/11/07 13:08
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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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Indiana Democrats pin legislative gains on abortion debate
Court Watch |
2022/11/01 15:53
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Even before Republican legislators this summer made Indiana the first state to pass an abortion ban since the U.S. Supreme Court overturned Roe v. Wade, Democrats started urging angry voters to take their revenge at the ballot box.
Indiana Democrats haven’t let up on that push in the final days of this year’s elections, although a limited number of competitive races on the Nov. 8 ballot for the currently Republican-dominated Legislature leave them with slim chances of being able to do much about abortion access that is also being debated during campaigns across the country.
Indiana Republicans, meanwhile, argue that voters are more worried about other issues such as inflation and crime — concerns widely believed to favor the GOP.
Democratic candidate Joey Mayer said the abortion ban has remained a top issue as she’s talked with voters in a northern Indianapolis suburban district where she’s challenging a four-term Republican House member who voted in favor of the ban when it passed in August.
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