Excellent link- thank you for posting it here... I'd recommend everyone read it as it goes into a fair bit of detail on both history and present practice of the court- including pointing out 2 things debunking some recent claims-
First it points out the rules are reviewed/updated annually, so 2023 isn't some weird OMG they reviewed the rules after 200 years thing-- and it points out generally those reviews/updates are for clarity or modernization and typically are apolitical and quite moderate. The rules currently under consideration, it notes, are to increase clarity around M&A and just technical clarifications.
Second-as I already mentioned- it points out the Elon case (without saying Elon-just "significant stockholder") is not a
new thing at all, not specific to this judge at all--It's been a Thing under the Entire Fairness doctrine for decades.... and both what the concern for a company with a "significant stockholder" and
how to avoid running afoul of the rule have likewise been clear for decades-
That's not a new framework. It's not "activist". It's known and established law, and the basis for the courts decision in the Elon comp case.
Again you can
certainly dispute specific aspects of the judgement in terms of how well or how poorly Tesla did the things needed to avoid falling under that rule (ie judgement of how independent the board really is--- or how informed the shareholder vote proxy statement was).... and Teslas lawyers are likely to do so on appeal... (and in at least some respects I think have
entirely valid points to raise on such an appeal)
But pretending this is some CRAZY WILD WEST ACIVIST JUDGE IGNORING PAST RULINGS just ain't so, and nobody has provided a shred of evidence for such a claim.
The link also has a quite nice compare/contrast of DE vs TX that's worth reading too... Some good (officers, not just directors have a fiduciary duty in TX for example)...and some bad (Texas business courts will allow jury trials in some cases for example)...and some unknown (the court has basically no prior case law to go on vs generations of it in DE for example)
Well worth reading the whole thing.
All that said- sounds like some folks are getting sick of the topic here, so reminder this exists and might be a better place to take follow-ups:
I don’t think Elon would leave Tesla if this fails. He would be offered another compensation package. I think he’d also know that asking for compensation for past achievements will be a tall order. I hope it passes but I do have my doubts.
teslamotorsclub.com