Elon Wins Big On Reduced Legal Fees Courtesy of Delaware Court

Funding Favors secured… 

Tesla’s board walked into court asking for mercy and received a happy ending instead. In a ruling that can only be described as spiritually violent, Delaware’s top court just took a machete to a nine-figure legal fee tied to Tesla’s board pay mess. The shareholder lawyers wanted $176 million. The court said $71 million. Please enjoy your economy seat.

(Source: Giphy) 

For context: this all stems from a derivative lawsuit challenging Tesla’s board compensation from 2017–2020… aka the era where Tesla directors were paid like SoundCloud rappers with a Series C. The settlement forced Tesla’s board to give back stock and options worth up to $735 million, plus forgo three years of future comp worth another $184 million. 

(Source: Reuters) 

Big for shareholders, right? Yes. But Delaware wasn’t buying the math gymnastics used to justify the lawyers’ cut. The lower court had treated the intrinsic value of the returned options as a “financial benefit” created by the lawsuit. The Delaware Supreme Court basically called it bean counting cosplay. Meaning, lawyers don’t get paid for money that was already there… especially when nobody agreed it counted. 

Additionally, Justice Valihura twisted the knife during oral arguments, pointing out that the original fee was $60 million more than Delaware’s entire judiciary budget last year… for a case that didn’t even go the distance. And yet, this isn’t an isolated incident. Just last month, Delaware also kneecapped a $345 million legal fee tied to Elon Musk’s nuclear-grade CEO pay package. That one got chopped down to $54.5 million, with the court openly saying it didn’t want to keep dealing with this case because it had already eaten years of judicial life force.

(Source: Giphy) 

Translation: Tesla keeps winning on fees. Shareholder lawyers keep learning that Delaware is no longer in its “let’s vibe” era. And the state’s business court is very clearly done being the world’s most expensive tip jar.

Which honestly feels on brand for a court that exists solely to remind everyone… politely, calmly, and with extreme prejudice… that this is still capitalism, not fantasy football LOL. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Tesla as mentioned in the article.