Musk $56 Billion Pay Case Final Ruling Expected by End of Year

A final ruling in the landmark litigation challenging Elon Musk’s $56 billion pay package, which a judge voided in January, will come by the end of the year, according to a filing by the judge.

Delaware Chancellor Kathaleen St. J. McCormick acknowledged in a letter to both sides late Thursday that a decision on the case’s remaining issues is taking longer than she’d hoped.

McCormick, chief judge of the state’s elite business court, is weighing a request by the prevailing lawyers for $7 billion in legal fees and Musk’s bid to restore the compensation deal after Tesla shareholders voted to re-approve it.

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“Sometimes, decisions require more time to prepare,” the judge said. “In the interest of transparency, I write to inform you that I am to issue that decision before the end of this year.”

Her blockbuster ruling striking down the record compensation deal set the tone for a year that has stress-tested Delaware’s long-cherished status as America’s corporate capital. The decision inspired a barrage of attacks by Musk, who has one of the world’s largest megaphones, and turbocharged efforts by states such as Texas and Nevada that are trying to lure companies away with business-friendly reputations.

The attorneys who brought the lawsuit on behalf of an individual investor followed up their win by asking to be paid with roughly 29 million Tesla Inc. shares valued at more than $7 billion—a request that drew worldwide attention, outraging the legions of retail shareholders with a worshipful view of their CEO.

Meanwhile, Musk proposed at the company’s June meeting to move it to Texas and “ratify” the invalidated pay package, measures that easily sailed through an investor vote. He then filed an unprecedented motion seeking, effectively, to overturn McCormick’s decision at the shareholder ballot.

Read More: Rule of Law Isn’t a Recommendation, for Elon Musk or Anyone Else

Court watchers had been anticipating a ruling soon thanks to a Delaware Chancery Court policy of issuing opinions “by the end of the month in which the 90-day period following final submission expires,” a guideline that pointed to a decision by Oct. 31. But the deadline is a soft one, and it’s not rare for Delaware’s overworked judges to miss it, especially in complex disputes.

Musk and the board are represented by Ross Aronstam & Moritz LLP, Quinn Emanuel Urquhart & Sullivan LLP, and Cravath, Swaine & Moore LLP. Tesla is represented by Morris, Nichols, Arsht & Tunnell LLP, Richards, Layton & Finger PA, and Sullivan & Cromwell LLP. The investor who led the case is represented by Bernstein Litowitz Berger & Grossmann LLP, Andrews & Springer LLC, and Friedman Oster & Tejtel PLLC.

The case is Tornetta v. Musk, Del. Ch., No. 2018-0408, letter to counsel 10/31/24.