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Court upholds judge’s finding that Tesla acquisition of Solar City was fair
Top Attorney News |
2023/06/06 10:10
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Delaware’s Supreme Court has upheld a judge’s decision in favor of Tesla CEO Elon Musk in a lawsuit challenging the electric car maker’s $2.4 billion acquisition of a solar panel company founded by two of his cousins.
The court on Tuesday rejected arguments from a group of Tesla shareholders that a Chancery Court judge erred in finding that Tesla’s deal to acquire SolarCity in 2016 was “entirely fair.” The judge made that determination even while finding that the process by which Tesla’s board of directors negotiated and recommended the deal to shareholders was “far from perfect.”
While noting errors in the trial court’s fair price analysis, and agreeing that the deal process was not “pitch perfect,” the justices said the record is replete with factual findings and credibility determinations indicating that the acquisition was “entirely fair.”
“We are convinced, after a thorough review of the extensive trial record, that the trial court’s decision is supported by the evidence and that the court committed no reversible error in applying the entire fairness test,” Justice Karen Valihura wrote in the court’s 106-page opinion.
Typically, under Delaware’s “business judgment” rule, courts give deference to a corporate board’s decision-making unless there is evidence that directors had conflicts or acted in bad faith. If a plaintiff can overcome the business judgment rule’s presumption because the deal involved a controlling shareholder or because directors might have been conflicted, the board’s action is subject to an “entire fairness” analysis. That shifts the burden to the corporation to show that the deal involved both fair dealing and fair price.
At the time of the acquisition, Musk owned about 22% of Tesla’s common stock and was the largest stockholder of SolarCity, as well as chairman of its board of directors.
The justices concluded that the findings by former Vice Chancellor Joseph Slights III, which were not challenged by the shareholders, support the conclusion that the overall deal process was the product of fair dealing. The Supreme Court also said that, while Slights failed to explain why and how he relied on Solar City’s stock price on the day the deal was announced, rather than the lower price on the day the deal closed, his fair price analysis did not amount to reversible error.
“The Court of Chancery, after examining all of the expert testimony and fair price evidence, found that the fair price case was not even close,” Valihiura noted.
An attorney for the shareholders argued in March that the Chancery Court judge put too much emphasis on the price Tesla paid for SolarCity, and not enough on the deal process, which the plaintiffs contend was tainted by the failure to appoint an independent committee to negotiate the deal. He also argued that the judge’s analysis of the deal price was flawed and that shareholders who voted to approve the deal were not properly informed, even though the vote was not required under Delaware law. |
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Biden and McCarthy reach a final deal and now must sell it to Congress
Top Attorney News |
2023/05/29 10:32
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With days to spare before a potential first-ever government default, President Joe Biden and House Speaker Kevin McCarthy reached final agreement Sunday on a deal to raise the nation’s debt ceiling and worked to ensure enough support in Congress to pass the measure in the coming week.
The Democratic president and Republican speaker spoke late in the day as negotiators rushed to draft and post the bill text for review, with compromises that neither the hard-right or left flank is likely to support. Instead, the leaders are working to gather backing from the political middle as Congress hurries toward votes before a June 5 deadline to avert a damaging federal default.
“Good news,” Biden declared Sunday evening at the White House.
“The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history,” he said. “Takes the threat of a catastrophic default off the table.”
The president urged both parties in Congress to come together for swift passage. “The speaker and I made clear from the start that the only way forward was a bipartisan agreement,” he said.
The final product includes spending cuts but risks angering some lawmakers as they take a closer look at the concessions. Biden told reporters at the White House upon his return from Delaware that he was confident the plan will make it to his desk.
McCarthy, too, was confident in remarks at the Capitol: “At the end of the day, people can look together to be able to pass this.”
The days ahead will determine whether Washington is again able to narrowly avoid a default on U.S. debt, as it has done many times before, or whether the global economy enters a potential crisis.
In the United States, a default could cause financial markets to freeze up and spark an international financial crisis. Analysts say millions of jobs would vanish, borrowing and unemployment rates would jump, and a stock-market plunge could erase trillions of dollars in household wealth. It would all but shatter the $24 trillion market for Treasury debt.
Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due soon as the world watches American leadership at stake.
McCarthy and his negotiators portrayed the deal as delivering for Republicans though it fell well short of the sweeping spending cuts they sought. Top White House officials were briefing Democratic lawmakers and phoning some directly to try to shore up support.
One surprise was a provision important to influential Sen. Joe Manchin, D-W.Va., giving congressional backing for the controversial Mountain Valley Pipeline, a natural gas project, that is certain to raise questions. |
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Egypt hands out life jail terms in trial over 2019 protests
Top Attorney News |
2023/01/16 14:54
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An Egyptian court on Sunday handed down life prison sentences to 38 people, including a self-exiled businessman whose social media posts helped to spark anti-government protests.
Public protests are rare in Egypt where President Abdel Fattah el-Sissi has overseen a wide-ranging crackdown on dissent. But a series of video and other social media posts by Egyptian businessman Mohamed Ali, who now lives in Spain, led to scattered street demonstrations in September 2019 over allegations of corruption and other issues.
Twenty-three of those who got life terms were tried in absentia, including Ali, according to an Egyptian criminal court handling terrorism-related cases.
The court also sentenced 44 others including children to terms ranging from five to 15 years in prison over the same charges. Twenty-one were acquitted, according to defense lawyer Ossama Badawi.
Those sentenced were convicted of a set of charges that included inciting violence against security forces and state institutions. The case stemmed from the 2019 protests in the port city of Suez that sits at the mouth of the Suez Canal.
Authorities arrested hundreds of people at the time in Cairo and across the country. Many were released but others were referred to trials.
Rights groups have repeatedly criticized such mass sentencings in Egypt and called on authorities to ensure fair trials.
Egypt’s government has in recent years jailed thousands of people, mainly Islamists, but also secular activists involved in the 2011 Arab Spring uprising that toppled longtime ruler Hosni Mubarak.
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Justices asked to hear dog toy dispute. Will they bite?
Top Attorney News |
2022/11/15 16:21
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The company that makes Jack Daniel’s is howling mad over a squeaking dog toy that parodies the whiskey’s signature bottle. Now, the liquor company is barking at the door of the Supreme Court.
Jack Daniel’s has asked the justices to hear its case against the manufacturer of the plastic Bad Spaniels toy. The high court could say as soon as Monday whether the justices will agree. A number of major companies from the makers of Campbell Soup to outdoor brand Patagonia and jeans maker Levi Strauss have urged the justices to take what they say is an important case for trademark law.
The toy that has Jack Daniel’s so doggone mad mimics the square shape of its whisky bottle as well as its black-and-white label and amber-colored liquor while adding what it calls “poop humor.” While the original bottle has the words “Old No. 7 brand” and “Tennessee Sour Mash Whiskey,” the parody proclaims: “The Old No. 2 on Your Tennessee Carpet.” Instead of the original’s note that it is 40% alcohol by volume, the parody says it’s “43% Poo by Vol.” and “100% Smelly.”
The toy retails for about $13 to $20 and the packaging notes in small font: “This product is not affiliated with Jack Daniel Distillery.”
The toy’s maker says Jack Daniel’s can’t take a joke. “It is ironic that America’s leading distiller of whiskey both lacks a sense of humor and does not recognize when it — and everyone else — has had enough,” lawyers for Arizona-based VIP Products wrote the high court. They told the justices that Jack Daniel’s has “waged war” against the company for “having the temerity to produce a pun-filled parody” of its bottle.
But Jack Daniel’s lead attorney, Lisa Blatt, made no bones about the company’s position in her filing.
“To be sure, everyone likes a good joke. But VIP’s profit-motivated ‘joke’ confuses consumers by taking advantage of Jack Daniel’s hard-earned goodwill,” she wrote for the Louisville, Kentucky-based Brown-Forman Corp., Jack Daniel’s parent company.
Blatt wrote that a lower court decision provides “near-blanket protection” to humorous trademark infringement. And she said it has “broad and dangerous consequences,” pointing to children who were hospitalized after eating marijuana-infused products that mimicked candy packaging.
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Ohio governor’s race split by pandemic, abortion, gun rights
Top Attorney News |
2022/10/20 12:33
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Just three years ago, Ohio Republican Gov. Mike DeWine and Dayton Mayor Nan Whaley, a Democrat, stood side by side, promising to push together for gun control proposals after a gunman killed nine people and wounded more than two dozen in the city’s nightclub district. It was a short-lived pledge.
Allies then, DeWine and Whaley are now facing each other in a partisan governor’s race defined by events that neither could have predicted at the time: the coronavirus pandemic and a U.S. Supreme Court’s ruling overturning Roe v. Wade.
They no longer see eye-to-eye on guns either. Their gun control proposals never came about, and since the Dayton mass shooting DeWine signed legislation loosening gun restrictions — including a so-called stand your ground bill eliminating the duty to retreat before using force and another making concealed weapons permits optional for those legally allowed to carry a weapon.
“The politics got hard and Mike DeWine folded,” Whaley said this year.
Both candidates survived contested primaries to face each other in November. DeWine overcame two far-right opponents who criticized him for his aggressive decisions early in the pandemic, including a business shut-down order and a statewide mask mandate. Despite more than four decades in Ohio politics, DeWine failed to secure 50% of the primary vote.
Whaley easily defeated former Cincinnati mayor John Cranley and is now trying to regain a seat last won by Democrats 16 years ago.
Since the primary, Whaley has hammered DeWine for signing those gun bills and for his anti-abortion positions, including his 2019 signing into law of Ohio’s anti-abortion “ fetal heartbeat bills.”
But despite criticism that DeWine took from members of his own party over his approach to the coronavirus and Democratic furor over the Supreme Court’s abortion ruling, most polls show DeWine comfortably ahead. Ultimately, that still comes down to DeWine’s long years in Ohio politics, said Tom Sutton, a political science professor at Baldwin-Wallace University.
Sutton noted that a September Marist poll found that 42% of adults statewide had either never heard of Whaley — who also ran briefly for governor in 2018 — or didn’t know how to rate her. Meanwhile, DeWine has previously won statewide races for lieutenant governor, U.S. senator, attorney general and governor.
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