Even if Elon Musk doesn’t follow up on his threat to fund a space mission with just $20 million, he’s making the two top executives at his electric-car company, Tesla, their most disgruntled partners to date.
On Friday, JPMorgan Chase and T Rowe Price told Tesla that they are owed $162 million because of Musk’s promise to pay the two companies $20 million for their failed attempts to turn Tesla into a space transport company last year.
Musk had announced his intentions in a tweetstorm last June. On Friday, it was JPMorgan and T Rowe Price who made their case to a judge for not only the unpaid money, but also for a settlement that calls for Musk to install two of the two companies as “company advisors” in return for the unpaid cash. Musk and Tesla had initially countered that all they’d owe was the original $20 million — and there was no demand for the $162 million.
Musk’s total monetary compensation, including bonuses, has risen to $34 million a year from $30 million last year, the filings show. Of that, $20 million is part of his base salary. He receives no bonus.
The court has not yet ruled on whether to grant JPMorgan and T Rowe Price’s request, and Tesla’s lawyers have not said how they will proceed. It has pushed the order to resolve the dispute off until at least June, giving it time to respond.
Tesla filed for its initial form of Chapter 11 bankruptcy in March in order to borrow enough money to fund production of its mass-market Model 3. But the company’s own filings say that the two complaints against it are “without merit.”
Tesla also says that the $20 million figure — which Musk and his team floated when they spoke to the media last year — actually involves contracts that have already been fulfilled. “Securities laws provide for an element of fraud to arise out of false statements made in the context of a purported negotiation,” they said in the filing.
Musk tweeted that the two companies, Rocket Lab and Virgin Orbit, would create a company that would build “a rocket that blasts cars into orbit and take astronauts to the moon and Mars for half the cost of the Apollo missions.”
Ford also sued Musk last year, alleging that his public statement about merging the electric-car company with other companies had induced them to sell a van to the company.
In their complaint against Tesla, JPMorgan and T Rowe Price claim that the loss of the funding “will not be insignificant.” When the space proposals were first announced, Tesla posted the news on the Tesla feed on Twitter. It was followed by a tweet from Musk announcing that those two companies would offer Tesla additional funding.
When asked why this money wasn’t paid to the two companies involved, Tesla said: “It was never intended to be paid. Elon suggested paying the compensation in cash, Tesla was not able to come to terms with SpaceX and although the conditions of the deal with Virgin Orbit have been met, they have not negotiated their agreements with Elon or TCLA. Tesla believes these are meritless claims and not the basis of any warrant for release.”
After Musk announced his plans for a new electric car company last year, it made headlines that both investors in California solar panel maker SolarCity and Musk’s cousin Jean-Claude Gillion ended up holding large stakes in Tesla.
Read the full story at Reuters.
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