Dover, Del. (AP) — Lawyers who successfully argued that Tesla CEO Elon Musk's massive pay package is illegal and should be invalidated have asked the presiding judge to award them $5.6 billion worth of company stock in legal fees.
The lawyers, who represented Tesla shareholders in the case decided in January, made the request to a Delaware judge in court papers filed on Friday.
It appears that this amount will be the largest amount of its kind ever, if approved. Lawyers in class actions stemming from Enron's collapse got a trial Record $688 million in legal fees in 2008
“We are ready to eat our cooking,” attorneys for the Tesla plaintiffs wrote in a court filing, saying the payment was justified because they had operated on a purely contingency basis for more than 5 years. If they lost, they would not get anything. They said the benefit to Tesla “was enormous.”
The requested award represents 11% of Tesla shares – worth about $55 billion – which Musk was seeking as part of the compensation package, which was ruled by Judge Kathleen St. Louis. Judd McCormick ruled it illegal in January.
Not only does the order take something off the electric car company's balance sheet, but it's also tax-deductible, lawyers said. They are also seeking $1.1 million in expenses.
In her ruling, Judge McCormick accepted shareholders' counsel's argument that Musk personally dictated the historic 2018 pay package in Moot negotiations With directors who were not independent.
That would have roughly doubled Musk's stake in Tesla. He currently owns 13%.
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