Elon Musk's Tesla-SolarCity hearing halted after someone pukes in court

Tesla bought Solar City in 2016 for $2.6B

The second day of Tesla CEO Elon Musk's SolarCity trial was temporarily halted Tuesday by Delaware's Chancery Court after someone got sick inside the courtroom.

A spokesperson for the Delaware Courts confirmed to FOX Business that a recess was called. The proceedings have since resumed, per reports. 


Musk is accused in a class-action shareholder lawsuit of pressuring the electric-vehicle maker's board to approve Tesla's $2.6 billion acquisition of SolarCity in 2016. Plaintiffs argue the transaction was rife with conflicts of interest and failed to produce the profits Musk had promised.

Tesla CEO Elon Musk defends Tesla Inc.'s 2016 deal for SolarCity at the Williams Justice Center in a case before the Delaware Court of Chancery, in Wilmington, Del., July 12, 2021, in this courtroom sketch. (REUTERS/Bill Hennessy)

Founded in 2006 by Musk's cousins, Lyndon and Peter Rive, Solar City became the largest residential solar installer. According to court records, Solar City posted revenue of $730 million in 2016 but with an $820 million net loss that same year. At the time of the all-stock purchase, Solar City had racked up more than $1.5 billion of debt and Musk was the company's largest stakeholder and its chairman. He also held an approximately 22% stake in Tesla.


Musk's return to court Tuesday follows a heated first day, when the executive didn't mince words as he defended the acquisition and denied any conflict of interest. On Monday, Musk became testy in multiple exchanges with opposing attorneys, including one in which he accused them of asking "really tricky and deceptive" questions.

During Monday's testimony, Musk said the deal was handled by an independent director and that he received no financial gain from the acquisition. He also emphasized that he had no influence over the appointment of board members, their removal or their compensation and said he was overruled by Tesla's directors on a proposal in which the company would provide temporary financing to SolarCity prior to completion of the deal.  

When asked by plaintiff's lawyer Randall Baron why Solar City’s performance came in significantly below projections given to shareholders by Tesla in 2016, Musk cited the company's need to develop its Model 3 vehicle in 2017 and 2018. He also cited the COVID-19 pandemic for impacting Tesla's recent efforts to acquire residential solar installation permits.

"I don’t think SolarCity was financially troubled," Musk said Monday. "In order to have a compelling product, you really needed to have a tightly integrated solar and battery solution. And we could not create a well-integrated product if SolarCity was a separate company."


Prior to Tuesday's recess, Musk was asked by Baron to explain notes from a financial adviser suggesting Musk set the $28.50 share price for SolarCity, conflicting with his statement that he had fully recused himself from negotiations. 

Musk denied Baron's accusation, arguing he only suggested what he considered to be a standard rate, and that the board ultimately suggested and settled on a range of $26.50 to $28.50. 

"This is part of the board process, making sure the board has accurate information," Musk added. "I was making the obvious point that any offer, if not publicly defensible, will be rejected by SolarCity shareholders."

Musk's court fight comes after a judge approved a $60 million settlement in August resolving claims made against all the directors on Tesla's board except Musk without any admission of fault. If Musk loses the Solar City case, he could be required to pay damages equal to the value of the Solar City transaction. A ruling on the case is expected to take months.

The Associated Press contributed to this report