Musk testifies for second day in trial over SolarCity acquisition lawsuit

Elon Musk on Tuesday defended his involvement in the company's $2.6 billion acquisition of SolarCity in court, claiming there was no controlling pressure on the deal.

According to the complaint filed by union pension funds and asset managers, the celebrity CEO coerced Tesla's board into squandering the company's assets to purchase SolarCity, which was running out of cash. Musk had a 22 percent interest in both Tesla and SolarCity at the time.

According to a court spokesman, proceedings on Tuesday were momentarily halted when an unnamed individual, who was not Musk, vomited in the court, Reuters reported.

The two-week trial before Vice Chancellor Joseph Slights in the Delaware Chancery court commenced on Monday.

However, shareholder attorney Randall Baron asked Musk on Tuesday to explain meeting notes obtained by a financial advisor, which showed Musk suggesting the board gives a $28.50 share price for SolarCity. Baron questioned if this contradicted Musk's claim that he had recused himself from talks.

"I was making the obvious point that any offer, if not publicly defensible will be rejected by SolarCity shareholders," Musk said.

The accusations that, although holding just 22 percent of Tesla, Musk was a dominant shareholder owing to his relationships to board members and dictatorial attitude are central to the case. If plaintiffs can demonstrate this, the court is more likely to decide that the sale was unjust to shareholders.

Musk appeared quiet and subdued throughout his appearance on Tuesday. He was more forthright than he had been on Monday when he had given meandering replies to yes or no questions and tussled with Baron.

Musk, as he did on Monday, repeatedly defended the SolarCity purchase, claiming that the solar panel company needed to be acquired fast or find funding to alleviate its severe cash deficit.

Members of the board and others engaged in the 2016 acquisition, including Musk's younger brother Kimbal, will testify beginning on Tuesday.

Last year, the company's directors resolved accusations from the same case for $60 million, which was covered by insurance, without admitting fault.

With inputs from Reuters

Picture Credits: WSJ