A distinguished Delaware law expert weighs in on Tesla's effort to ratify the outrageous Musk compensation package. Musk fights back, down and dirty. But, it's no contest.
Obviously, any guess about Tesla is always perilous. But I'll guess that the vote to reincorporate is less favorable for Tesla than the vote to ratify the 2018 Grant.
It does seem crazy. Texas has not yet even appointed judges to its brand new Business Court. Whereas Delaware has both a non-partisan Court of Chancery and exceptionally well-developed corporate case law.
I would be interested to know how any deferred tax losses in the cookie jar would be handled if the company were to reincorporate in Texas. Would such losses be immediately accelerated to the present?
No, I don't...that's why I asked. But sometimes, there ARE tax ramifications to such stuff.
Today I read somewhere (YOU?) that the options that Chancellor McCormick voided no longer exist. If new options are issued by Tesla to EV Jesus based on the current price of the stock, there are tax issues for Tesla. Don't know if that's true, but it has the ring of truth to it.
Generally speaking, if you assume that anything you do is a taxable event, you will be right more often than not
In a previous post (?I think?), you commented that the NHTSA findings on Autopilot/FSD nearly reach the level of criminal culpability. For the sake of argument, lets say they do.
In that event, where does this leave Ms. Robyn Denholm? Any chance she could find herself in a set of bracelets provided by the Justice Department. 'Accessory to Manslaughter' has a nice ring to it.
The visual of having her frog marched out in bracelets has to be worth something even if the charges are ultimately dropped.
Ms Denholm and others on the board must carry responsibility for their actions, including answering to law. It can not be that Elon Musk should face the music alone.
I agree. Ms. Denholm will face more litigation costs from the latest gambit. Alas, she is so wealthy thanks to Tesla stock awarded for her board service, none of that matters. All those costs and potential liabilities are inconsequential.
I did not know until I was part of a company that I founded that it is an entity - it has rights and the board members have obligations to that entity. I am sure much of this applies in the USA as it does in the UK.
La Denholm and the rest have to take responsibility. Costs will hurt, but if the wrong-doing is severe enough, and the legal process agrees, then jail beckons. As a director she should know this, and not act recklessly. As such her exposure to risk from Musk is severe, so if she took the role seriously, she should have limited her potential liability and resigned long ago - but she hasn't. None of the board have done this. That's interesting.
Reuters have been at work again, suggesting the Supercharger team were fired because the headcount reduction was not enough. The cut was too deep, and of course was subsequently partially reversed. It was also an astounding tactical error.
It appears unlikely that Musk's attempt at self-enrichment will succeed in the Delaware courts, even if it is ratified by shareholders.
What about the move to Texas? How do you think that vote will go?
Obviously, any guess about Tesla is always perilous. But I'll guess that the vote to reincorporate is less favorable for Tesla than the vote to ratify the 2018 Grant.
It does seem crazy. Texas has not yet even appointed judges to its brand new Business Court. Whereas Delaware has both a non-partisan Court of Chancery and exceptionally well-developed corporate case law.
I would be interested to know how any deferred tax losses in the cookie jar would be handled if the company were to reincorporate in Texas. Would such losses be immediately accelerated to the present?
Not sure that reincorporation should affect that. Do you know otherwise?
No, I don't...that's why I asked. But sometimes, there ARE tax ramifications to such stuff.
Today I read somewhere (YOU?) that the options that Chancellor McCormick voided no longer exist. If new options are issued by Tesla to EV Jesus based on the current price of the stock, there are tax issues for Tesla. Don't know if that's true, but it has the ring of truth to it.
Generally speaking, if you assume that anything you do is a taxable event, you will be right more often than not
In a previous post (?I think?), you commented that the NHTSA findings on Autopilot/FSD nearly reach the level of criminal culpability. For the sake of argument, lets say they do.
In that event, where does this leave Ms. Robyn Denholm? Any chance she could find herself in a set of bracelets provided by the Justice Department. 'Accessory to Manslaughter' has a nice ring to it.
The visual of having her frog marched out in bracelets has to be worth something even if the charges are ultimately dropped.
I don't see any potential liability for Denholm or any of the other Tesla directors.
Musk is *deserving* of criminal charges, but it's (alas) unlikely that will ever happen.
Ms Denholm and others on the board must carry responsibility for their actions, including answering to law. It can not be that Elon Musk should face the music alone.
I agree. Ms. Denholm will face more litigation costs from the latest gambit. Alas, she is so wealthy thanks to Tesla stock awarded for her board service, none of that matters. All those costs and potential liabilities are inconsequential.
I did not know until I was part of a company that I founded that it is an entity - it has rights and the board members have obligations to that entity. I am sure much of this applies in the USA as it does in the UK.
La Denholm and the rest have to take responsibility. Costs will hurt, but if the wrong-doing is severe enough, and the legal process agrees, then jail beckons. As a director she should know this, and not act recklessly. As such her exposure to risk from Musk is severe, so if she took the role seriously, she should have limited her potential liability and resigned long ago - but she hasn't. None of the board have done this. That's interesting.
Great to see wise words from Mr Fossi once more.
Reuters have been at work again, suggesting the Supercharger team were fired because the headcount reduction was not enough. The cut was too deep, and of course was subsequently partially reversed. It was also an astounding tactical error.
It seems to me that this the strangest chapter yet in a very bizarre narrative.
"Even if she doesn’t, she will have to read the brief in order to rule on it. Nice going, Elon."
LOL
Great post. Is the musk/tesla response available yet? I saw some reporting on the response where Musk-la deny the threat.