- Elon Musk is facing a class action lawsuit over tweets claiming he secured funding to take Tesla private.
- His attorneys say the trial should be held in Texas rather than California to ensure fairness.
- Since Musk’s takeover of Twitter, potential jurors have been biased against the billionaire, they argued.
Elon Musk’s takeover of Twitter has made him so unpopular in the state of California that he is unlikely to receive a fair trial, his lawyers argued in a recent court filing.
Tesla’s chief executive is facing a class action lawsuit over his 2018 tweets saying he planned to take the electric vehicle company private at $420 a share and had “secure funding” to do so.
Just a month after the initial 2018 tweet, Musk paid a $20 million fine and settled fraud charges with the SEC for making “false and misleading statements.” Although Musk neither admitted nor denied the allegations, he resigned as Tesla chairman and was replaced by Robyn Denholm.
Senior District of Northern California Judge Edward M. Chen, who will oversee the class action lawsuit, ruled last year that Musk knowingly made false statements, which could have impacted the course of the lawsuit. stock of Tesla. The upcoming lawsuit will determine whether the messages actually impacted Tesla’s share price, whether the company or its directors should be held liable and whether shareholders are entitled to damages, according to NBC News.
After finalizing his $44 billion deal to buy Twitter last year, the billionaire remains about $13 billion in debt – much of it secured by his remaining Tesla stake in the leveraged buyout. , reported The Street, making the financial future of the two companies deeply connected.
Since acquiring Twitter on Oct. 27, Tesla’s stock price has fallen from $225.09 to $113.06 per share, its lowest point since August 2020.
Musk’s business dealings since acquiring the social media company, including mass layoffs and a culture current employees describe as ‘toxic’, may also make it harder for the billionaire to be tried by a jury. of his peers in California, according to his attorneys, and should be moved to Texas.
Musk’s attorney, Alex Spiro, argued in a motion filed Friday that a “substantial portion of the jury pool in this district is likely to have a personal and material bias against Mr. Musk as a result of recent dismissals in one of his companies as an individual”. potential jurors – or their friends and relatives – may have been personally affected. The existing grassroots bias was compounded, widened and reinforced by the negative and inflammatory local publicity surrounding the events.
In December 2021, Tesla moved its headquarters from Silicon Valley to Austin, Texas. Twitter remains based in San Francisco, California.
Referring to regular protests and pickets outside Musk’s offices in San Francisco — some of which, Spiro said, are “endorsed and encouraged by local political figures” — Musk’s attorneys noted in the record that “the negativity towards Mr. Musk was not isolated”. to the press” and “deprive him of an impartial jury and his constitutional right to a fair trial”.
If the location transfer request was not granted by the court, Spiro requested an extension to delay the trial, arguing that the judge should allow time for “passions that have been inflamed” by “recent events and coverage biased local media to dissipate”. before jurors hear the case.
The application is set to be heard by Judge Chen on January 13, according to the filing, just four days before the trial begins.
Musk, his legal team and Tesla representatives did not immediately respond to Insider’s requests for comment.