NEW YORK, Sept. 20, 2016 /PRNewswire/ -- Levi & Korsinsky, LLP announces that it filed a lawsuit on behalf Tesla Motors, Inc. to challenge its proposed acquisition of SolarCity. The lawsuit alleges that Elon Musk and other conflicted Tesla directors, with the assistance of certain SolarCity directors, orchestrated Tesla's acquisition of SolarCity to protect their personal investments in SolarCity, and Musk's legacy in the solar energy industry.
According to the complaint, before the announcement of this deal, SolarCity was on the verge of collapse. If SolarCity fails, Musk and his family and friends, who are Tesla and SolarCity directors, will lose millions of dollars that they invested in SolarCity. In order to prevent these losses and protect their personal interests, Musk, Tesla's CEO, Chairman and controlling stockholder, and the other Tesla and SolarCity directors forced Tesla to bailout SolarCity at a vastly inflated price. In fact, Musk, and his family and friends will collect nearly $1 billion of SolarCity's purported $2.6 billion equity value while saddling Tesla with more than $3 billion of SolarCity's debt. The SolarCity acquisition may also destroy Tesla's future. Tesla is close to achieving its goal of mass producing an affordable electric car and becoming a profitable company, but it still faces many obstacles. Tesla, therefore, cannot afford the distraction of integrating a cash burning, non-core asset into the company.