Lawyers in the US state of Delaware are asking a judge to give them nearly $6 billion. They have made this request after successfully arguing that a $56 billion payment to Tesla’s CEO Elon Musk was too much. They want the enormous sum to be paid in Tesla stocks. Paying this amount would create a new record for attorneys’ fees.
The law firms acknowledged that the requested fee is very large. They also calculated that it would work out to $288,888 per hour.
Elon Musk has hit out at the lawyers on social media, calling their demand criminal. He said that these lawyers did nothing but harm Tesla and now want $6 billion.
The lawyers represented Richard Tornetta, a Tesla shareholder. In 2018, Tornetta sued Musk for his huge pay package. Legal professionals claimed that Tesla should pay them because the carmaker benefited from their win. This win returned 266 million shares to Tesla.
Tesla’s stocks closed at $202.62 on Friday. This makes the value of the returned shares about $53.9 billion.
Lawyers argue that their fee would not require Tesla to use its funds as it would be drawn from the benefit. They also highlighted that their fee would be tax deductible.
The current record for the largest legal fee ever awarded is $688 million. This was given in 2008 to lawyers who won a securities fraud case over the collapse of Enron Corp.
Musk is currently the richest man in the world, with a worth of $215 billion according to the Bloomberg Billionaire Index. He is likely to appeal the judge’s ruling and is considering moving Tesla’s legal base from Delaware to Texas.
Vocabulary List:
- Attorneys (noun): Legal professionals who practice law.
- Acknowledged (verb): Accepted or recognized the existence or truth of something.
- Benefited (verb): Received an advantageprofitor gain.
- Deductible (adjective): Able to be taken away or subtractedparticularly in tax calculations.
- Appeal (noun): A legal process to challenge a decision or judgment.
- Securities (noun): Financial instruments like stocks and bonds.
