I have so many thoughts on this, as a super aggravated #Tesla shareholder. The agro midlife crisis of a billionaire manchild is whittling away my share price.
— Victoria Haneman (@TaxLawProf) December 13, 2022
But @PrawfBainbridge is teaching a law school class dedicated to #Elon and I would love to hear HIS thoughts.
2/ Elon's liability could be either contractual or fiduciary. I have not seen and made no effort to find Elon's employment contract with Tesla, if any. Assuming Elon has one, it probably has a time and effort clause. Example below. pic.twitter.com/zddB66GKxI
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
4/ I am not a fan of these clauses as a drafting matter. I'd love for @AdamsDrafting to comment on the drafting of full time and effort clauses. I find them difficult to enforce. Plus, they are mainly used as a noncompetition device not to police slacking.
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
6/ In derivative litigation, a shareholder must either make demand on the board of directors or establish in court that demand would be excused as futile. High hurdles. Complex issues of board independence etc. My corporate law text devotes 14 pages to it. https://t.co/HACaQjiyhr
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
8/ In any case, any breach of fiduciary duty lawsuit would again be derivative in nature. As long as #Tesla's board is independent (an issue in several pending cases) and disinterested, there is no way for a shareholder to bring suit. See In re Tesla Motors, Inc. S'holder Litig.
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
10/ In the class session we'll ask a number of interesting questions. One of them will be a small group exercise: pic.twitter.com/XUy37VQAIg
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
12/ I'm not aware of any case directly on point. But in Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 833 A.2d 961 (Del. Ch. 2003), the Court declined to hold MSO's board liable for failing to supervise and prevent Stewart's insider trading.
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
11A/ Speaking of Tom Lin, he doesn't;t spend a ton of time on Twitter but I'm going to tag him in anyway. @tomcwlin
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
13/ Of course, we're all assuming a plaintiff would be able to show a causal link between Tesla's stock price slide and Musk's side gig at Twitter. Given all the other challenges #Tesla faces, I suspect that would be non-trivial.
— Steve Bainbridge (@PrawfBainbridge) December 13, 2022
