VCG
Three law firms have asked the US court in Delaware to award them Tesla (NASDAQ:TSLA) shares worth nearly $6 billion as their commission to successfully secure Elon Musk’s $55 billion pay package was cancelled.
On January 30, Delaware Court of Chancery Chief Judge Kathaleen McCormick canceled a 2018 performance-based stock option award worth $55 billion owed to Musk after a shareholder lawsuit claimed the package was improperly approved.
The shareholder lawsuit was filed by former heavy metal drummer Richard Tornetta on behalf of his fellow Tesla (TSLA) investors.
The three law firms are Bernstein, Litowitz, Berger & Grossmann and Friedman Oster & Tejtel based in New York and Andrews & Springer based in Wilmington, Del..
“After extensive motion practice, a thorough investigation, and a full trial on the merits, followed by briefing, oral argument, and supplemental briefing, Plaintiff has obtained complete rescission of the largest pay package ever issued,” the companies said in a joint filing in the Delaware Court of Chancery on Friday.
The law firms are asking for just over 11% of the shares that would otherwise have gone to Musk as part of his compensation package, or about 29.4 million shares. Based on the latest closing price of Tesla (TSLA) stock of $202.64, the fee amounts to $5.96 billion. If awarded, it would be the biggest gain for lawyers in a corporate case.
“We recognize that the requested fee is unprecedented in absolute size,” the law firms said in the statement.
Musk contributed to the development. “Lawyers who have done nothing but harm Tesla (TSLA) want $6 billion. Criminals,” the billionaire businessman said on X (formerly Twitter). In a separate response to another user’s post, Musk said “the system is broken. Better get out of Delaware ASAP.”