Lawsuits could delay Tesla Motors’ proposed merger with SolarCity.
In an SEC filing released Monday, Tesla said the merger is being challenged in four separate lawsuits that were filed in early September.
The main claims: Tesla and SolarCity breached their fiduciary duties to shareholders, and Tesla failed to disclose certain material facts.
A court hearing is set for Oct. 18, during which the judge could consolidate all the suits. Any injunction could delay the proposed merger of the electric car company and the solar energy equipment provider, set for later this year.
After the proposed deal was announced in June, stock investors sent the value of both companies down.
Financial analysts have called the $2.6-billion all-stock deal an attempted bailout for both companies: Each faces a cash-flow crunch.
Patrick Jobin, an analyst who follows SolarCity for Credit Suisse, said at the time “we put a low 20-40% probability” of the deal being completed.
Elon Musk sees the deal as a “no-brainer.” He is chairman of both companies and holds substantial personal stakes in both.
There are also family ties between the two companies: Musk is chief executive at Tesla. His cousin, Lyndon Rive, is chief executive at SolarCity, and Lyndon’s brother Peter is SolarCity’s chief technology officer.
The filing called the lawsuits “without merit.”
Meantime, after several incidents involving its Autopilot semi-autonomous driving feature, Tesla plans this week to introduce a major update to the software.
Musk recently announced it will boost radar software on Tesla cars to augment the vehicles’ camera and video processing capabilities.
Tesla is feuding with Mobileye, the maker of the cameras, over matters of safety and business contracts. Mobileye earlier had announced it would end its relationship with Tesla following a fatal car crash that involved Autopilot and Mobileye’s video system.