Tesla Merger Is a Green Light for Lawyers
Now that Tesla has acquired Solar City, it will be a go for lawyers also.
Tesla, the largest electric car-maker in the United States, merged with Solar City, the largest solar panel company in the country, in a $2 billion deal. Shareholders of the companies approved the merger, with stock prices rising about 1.1 percent to almost $187 a share. Elon Musk, who now effectively runs both companies, said the acquisition was all about sustainable energy. The merger will sustain lawyers for some time as well.
Attorneys Already in the Mix
Tesla needed to overcome "conflict-of-interest" hurdles on the way to the merger, which was proposed to shareholders last winter. It was a significant challenge for attorneys, who had to negotiate around some missteps by the companies' founders -- Musk for Tesla and his cousins Lyndon and Peter Rive for Solar City. Tesla stock fell about 15% after the early offer amidst concerns about nondisclosures.
Lawyers were all over the necessary SEC filings, and also were directly involved in the negotiations leading up to the acquisition. Skadden Arps and Wachtell Lipton had key roles.
First Comes Marriage, Then Litigation
During the merger talks, several shareholders and pension funds sued, claiming that Musk was trying to use Tesla to bail out Solar City. The lawsuits allege that Tesla's board failed to carry out its fiduciary duties in the proposed merger, and that insiders would be unjustly enriched by the acquisition.
In the meantime, Tesla has other legal concerns making headlines. In the summer, the company announced the first death in one of its self-driving vehicles. The company said it was the first casualty in more than 130 million miles driven in autopilot. Among other vehicles, Tesla said, there is a fatality in every 94 million miles.
This all comes when Tesla is trying to produce a mass-market electric car, priced at $35,000, called the Model 3. The company hopes to sell 500,000-vehicles-a-year by 2018.
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