When Are Minority Stockholders Controllers?

Law360 (April 9, 2018, 12:51 PM EDT) -- Recently in In re Tesla Motors Inc. Stockholder Litigation, the Delaware Court of Chancery (in an opinion by Vice Chancellor Joseph R. Slights III) declined to grant the defendants’ motion to dismiss because the court found it reasonably conceivable that Elon Musk, a 22.1 percent stockholder of Tesla Motors Inc., was a controlling stockholder, and therefore, Tesla’s 2016 acquisition of SolarCity Corp. (of which Musk was the largest stockholder and founder) would be subject to a stringent entire fairness review. In this regard, it is rare for...
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