Lawsuit filed against Tesla CEO Elon Musk to prevent Twitter’s buyout

A lawsuit has been filed against Tesla CEO Elon Musk by a Florida pension fund to prevent Twitter’s buyout by the billionaire.

In its filing, the pension fund stated that Musk is going against Delaware’s law as he has other obligations towards Tesla’s shareholders.

But Musk has agreements with Twitter founder Jack Dorsey and his financial advisor Morgan Stanley to support the buyout. They own 2.4 per cent and 8.8 per cent of Twitter’s shares. 

The pension fund has stated that it needs to be delayed by three years unless two-thirds of shares owned by other shareholders grant him approval.

Florida’s governor Ron DeSantis had said earlier this week that if Musk completes his buyout, the state’s pension fund will make a $15m to $20m profit.

In another lawsuit, a Tesla investor will argue the CEO’s $56 billion pay package from the company is a waste of money that failed to secure his full-time services.

Also see | Here’s how much Twitter shareholders will get after Elon Musk’s $44bn offer

According to one of the shareholder’s attorneys, the deal for Twitter Inc and its potential to distract Musk from Tesla will play an important part of the trial in October.

In 2018, Musk had created the 10-year package without requiring the celebrity CEO to devote himself to the electric vehicle maker.

“Look at most CEO contracts. The first line, it says ‘you’re going to be a full-time CEO and devote substantially full time to the business and affairs of the company.’ That’s standard,” said Greg Varallo of Bernstein Litowitz Berger & Grossmann, the firm that is leading the case against the pay deal.

(With inputs from agencies)

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