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Activist Judge Shamelessly Disregards Legal Precedent and Rules Against a Tesla Supermajority Vote

The Lawfare Against Elon Musk

Tuesday, December 3rd, 2024: By, Walter Curt

The Delaware Chancery Court's decision to rescind Elon Musk's 2018 compensation package and impose a staggering $345 million in legal fees on Tesla is nothing short of a politically motivated assault on corporate governance and shareholder autonomy.

This ruling reeks of judicial activism designed to undermine Musk, whose influence on Tesla is as undeniable as his revolutionary success in business.

The court's claim that Tesla's shareholders were "not properly informed" about Musk's influence is patently absurd. Musk is not only the face of Tesla but also one of the most famous and accomplished individuals in the world. Arguing that shareholders—who approved the compensation package by a supermajority vote—were unaware of Musk's role is both insulting and illogical.

Further, the court's reliance on the so-called lack of "informed" shareholder consent is an egregious departure from established Delaware law. In Williams v. Geier, the Delaware Supreme Court affirmed that supermajority shareholder approval could cleanse conflicts of interest when disclosures are reasonably sufficient.

Yet in this absurd 103-page ruling, the court invalidated the overwhelming will of Tesla's shareholders based on alleged procedural flaws and "misleading" statements in Tesla's proxy materials, ignoring the clear and obvious context of Musk's role. The shareholders knew exactly what they were voting for—rewarding the man responsible for making Tesla the global leader in electric vehicles.

This judicial overreach sets a dangerous precedent that allows judges to undermine shareholder democracy and rewrite corporate decisions based on subjective biases. Even worse, the court's punitive fee award against Tesla's legal team is an affront to common sense and fairness.

Awarding $345 million in attorney's fees for a compensation dispute is not only excessive but also exposes the political motivations behind this sham ruling.

This case is a glaring example of the judicial system being weaponized against high-profile innovators like Musk, similar to the Trump cases where partisan bias masquerades as legal reasoning.

The Delaware Court of Chancery has tarnished its reputation as a bastion of corporate law by undermining the principles of shareholder governance it once upheld.

This decision must and will be overturned on appeal, as it brazenly contradicts decades of precedent and the foundational tenets of corporate law.

Shareholders—not politically charged courts—must retain the ultimate authority over corporate decisions.