Lawyers who successfully argued that Tesla CEO Elon Musk’s $56 billion salary was excessive have asked a Delaware judge to award them nearly $6 billion in damages. I’m looking for it.
If approved, the law eagle’s jaw-dropping paycheck – which he seeks to pay in stock in the electric car maker – would shatter previous records for legal fees.
“We recognize that the requested fees are unprecedented in their absolute magnitude,” the three law firms said in a filing requesting the fees with the Delaware Court of Chancery. Ta.
They noted the proposed rate would translate into an hourly rate of $288,888.
Elon Musk criticized the lawyer’s suggestion He received the award as a “criminal” after writing on his social media platform X, “Lawyers who did nothing but damage Tesla are demanding $6 billion.”
The legal team represented Tesla shareholder Richard Tornetta. He is the former drummer for the Philadelphia-based thrash band Dawn of Collection, who sued Mr. Musk in 2018 over his princely pay.
The lawsuit, filed by Mr. Tornetta on behalf of other shareholders, alleges that Mr. Musk ultimately controlled the approval process that determined the terms of the compensation package and that the board ultimately misled investors who voted for the CEO’s windfall. He claims that he did so.
In January, Court of Chancery Judge Kathleen McCormick ruled in favor of a lawsuit to invalidate Musk’s compensation, stating that it was awarded through a process that was “deeply flawed” and “incalculable.” It was deemed that the amount was “no amount”.
Lawyers argued that Tesla should pay the eye-watering fees because it benefited from a victory that saw 266 million shares returned to the electric car maker.
Tesla stock closed at $202.62 on Friday, making the block of stock worth about $53.9 billion.
“This structure has the advantage of directly tying the profits earned, avoiding every penny from Tesla’s balance sheet for fee payments,” the lawyers wrote.
They noted that the fees are tax deductible.
The previous record for legal fees was $688 million paid in 2008 to lawyers who won a $7.2 billion settlement in the securities fraud case surrounding Enron’s collapse.
Musk is currently the richest person in the world, worth $215 billion, according to the Bloomberg Billionaires Index.
He plans to appeal the ruling and said he is considering moving Tesla from Delaware, where about 70% of the company’s largest company is based, to Texas in response to the lawsuit.
He moved SpaceX’s incorporation to Texas two weeks ago.
Three law firms represented Tesla shareholders in the case: Bernstein Litowitz Berger and Grossman, and Friedman Oster and Teitel, both New York-based law firms. Andrews and Springer of Wilmington, Delaware;
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