When Tesla bought SolarCity in 2016, Elon Musk billed the deal as a match made in green energy heaven. What he didn't mention: SolarCity was in deep financial trouble.
as a match made in green energy heaven: Combine a hot electric car company with the nation’s then-largest provider of solar rooftop panels to create a one-stop shop for clean energy customers.Just weeks after the merger, SolarCity auditor Ernst & Young concluded the company lacked “sufficient cash to meet its obligations” as a stand-alone company, according to court filings unsealed Monday.
In its motion, the plaintiff seeks summary judgment from the Delaware Chancery Court on key parts of the SolarCity case.Tesla issued a statement to The Times on Monday evening: “These allegations are based on the claims of plaintiff’s lawyers looking for a payday, and are not representative of our shareholders who support our mission and ultimately voted in favor of the acquisition.
In a further entanglement, another Musk company, the privately financed SpaceX, had loaned money to SolarCity to help keep the solar panel company’s cash position from dipping below $169 million, an event that would have triggered a bond default and possibly led to bankruptcy. By April, SolarCity board members heard from Rive and others that solar panel installations were expected to decline 28% for 2016, but the lawsuit alleges that the information never made its way to public investors.
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