Elon Musk, Chairman of SolarCity and CEO of Tesla Motors, speaks at SolarCity’s Inside Energy Summit in Manhattan.
Rashid Umar Abbas | Reuters
The judge presiding over the case pitting Tesla shareholders against the electric carmaker said the trial is being delayed because of concerns surrounding the spread of the coronavirus. It was scheduled to begin next week.
“I make this decision out of an abundance of caution, not based on any information that the Court’s Standing Order has been invoked by any party or by the Court,” Vice Chancellor Joseph Slights of the Delaware Court of Chancery wrote on Friday. “Please know that this was not an easy decision to reach, given the time and resources I know you have dedicated to prepare for this trial, and the last minute nature of this decision.”
In the Tesla case, shareholders are accusing the company of improperly valuing SolarCity, when it acquired the solar panel installer for $2.6 billion in 2016. At the time, Tesla CEO Elon Musk was the chairman and largest shareholder of SolarCity, which was founded and run by his first cousins, Lyndon and Peter Rive, in addition to his role Tesla, where he was also the top stakeholder.
Tesla investors say that even though Musk claims he recused himself when necessary, he was never really divorced from the deal-making process and orchestrated what amounted to a bailout of a cash-burning business. Tesla’s solar business has been in decline over the last couple years, with the company cutting staff and closing facilities.
The trial is expected to last two weeks.
Delaware Governor John Carney declared a state of emergency on Thursday and advised against holding non-essential gatherings of 100 people or more.
“We are expecting that more than 100 people may well gather in connection with this trial,” Slights said, adding that lawyers and witnesses will be coming from all over the country. “And while I certainly would not characterize this trial, or any other trial, as ‘non-essential,’ it is not expedited and no irreparable harm will flow from an adjournment.”
The delay follows the postponement and cancellation of major events across the country, from professional sports leagues and festivals to concerts and conferences. Confirmed coronavirus cases in the U.S. surpassed 1,700 this week, and deaths have topped 40. President Donald Trump plans to declare a national emergency on Friday over the pandemic, administration officials told NBC News.
“I will be in touch with counsel soon to discuss rescheduling,” Slights wrote. “In the meantime, thank you for your understanding and be safe.”
— CNBC’s Lora Kolodny contributed to this report
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