Question
Elon Tusk is the chairman, CEO, and the largest stockholder of an electronic car company called Model 3. He is also the founder and the
Elon Tusk is the chairman, CEO, and the largest stockholder of an electronic car company called Model 3. He is also the founder and the largest shareholder of the company called SolarTown. As SolarTown grew, it took on debt to cover the upfront costs of purchasing and installing solar panels. SolarTown allegedly faced a liquidity crisis. In addition, SolarTown was sued for alleged misappropriation of intellectual property and trade secrets. It was against this backdrop that Tusk allegedly began advocating for Model 3 to acquire SolarTown. Tusk proposed the transaction at three successive board meetings, and at the fourth meeting the board authorized its advisors to make an offer. The board did not consider acquisitions of any alternative targets. Tusk and another Model 3 director who also served on SolarTowns board recused themselves from the vote, but both remained for the entirety of the meeting while the potential acquisition was discussed, and Tusk led most of those discussions. Tusks offer to acquire SolarTown valued the company at $2.6 to $2.8 billion, reflecting a 21% to 30% premium. Allegedly, Tusk actively promoted the offer within Model 3 and used his public statements to establish an expectation of deal certainty that boxed in Model 3s board so that they had no choice but to follow through with the acquisition. Tusks due diligence of SolarTown revealed liquidity issues as well as the fact that one of SolarTowns new manufacturing facilities was behind schedule, risking tax incentives from the State of New York. You are a shareholder of Model 3 Company. Please respond to the following by IRAC-ing every issue relevant to each question: ANSWER THIS QUESTION IN IRAC FORM PLEASE Is this a direct or derivative claim? In your response explain your reasoning whether this is a direct or derivative claim. Also, in your response explain what steps you need to take to bring this lawsuit?
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