Two pension funds are asking a judge to combine a group of lawsuits that allege Elon Musk harmed
Rhode Island’s retirement system and a Cleveland union fund moved Wednesday to consolidate the three cases, each a shareholder suit filed in Delaware’s Chancery Court days before Musk moved the automaker’s charter to Texas. The disputes concern “overlapping claims involving essentially the same defendants,” according to the brief court filing.
Although the funds made the motion jointly, it could preview a high-stakes fight to lead litigation offering a potentially enormous payday. The shareholder attorneys who sued to invalidate Musk’s record $56 billion compensation package, for instance, have asked a judge to be paid with Tesla stock valued at around $7 billion, a request she’s still considering.
Musk relocated Tesla on June 14 after spending months lashing out over the landmark pay decision by Chancellor Kathaleen St. J. McCormick. The reincorporation came a day after Tesla’s investors overwhelmingly signed off on the move and voted to reinstate his compensation. McCormick is currently weighing whether to revise her January ruling in light of the vote.
Final Delaware Court Fight
The three investor lawsuits—filed between late May and mid-June by the pension funds and a third stockholder—represent a final effort to hold Musk accountable in Delaware for his alleged wrongdoing at Tesla’s helm. They involve claims that the billionaire stole corporate opportunities when he bought Twitter and started a new business, xAI, after failing to engineer a merger between Tesla and
The Delaware shareholder suits also say Musk sold billions worth of Tesla stock based on inside information while manipulating the market.
The bid to consolidate the three disputes is opposed by Tesla, Musk, other board members, and Michael Perry, the investor who submitted one of the court complaints, according to Wednesday’s filing. The pension funds said that if the cases are combined, they’ll either reach an agreement on how to handle the litigation or file competing applications to lead the lawsuit.
The cases involve shareholder derivative claims, which are technically brought on a corporation’s behalf against its leaders. Damages in derivative cases are typically paid into a company’s coffers by its officers, its directors, its controlling stockholders, or their insurers.
The Employees Retirement System of Rhode Island is represented by Prickett, Jones & Elliott PA and Lieff Cabraser Heimann & Bernstein LLP. The Cleveland Bakers and Teamsters Pension Fund is represented by Grant & Eisenhofer PA, Saxena White PA, and Schall Law Firm. Perry is represented by deLeeuw Law LLC, Squitieri & Fearon LLP, and Moore Law PLLC.
Tesla, Musk, and the other board members are represented by Richards, Layton & Finger PA and Freshfields Bruckhaus Deringer US LLP.
The cases are Perry v. Musk, Del. Ch., No. 2024-0560, motion filed 8/7/24, Emp. Ret. Sys. of R.I. v. Musk, Del. Ch., No. 2024-0631, 8/7/24, and Cleveland Bakers & Teamsters Pension Fund v. Musk, Del. Ch., No. 2024-0646, 8/7/24.
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