In a filing in Manhattan federal court, Tesla accused JPMorgan of “bad faith and greed” for seeking $162.2 million after the bank unilaterally changed the terms of the warrant it received when Tesla sold convertible bonds in 2014. Was.
see photosIn a filing filed in Manhattan federal court, Tesla accused JPMorgan of “bad faith and greed.”
Tesla Inc. on Monday fought a disputed bond contract against JPMorgan Chase & Co., counting on the bank for a “windfall” following Elon Musk’s infamous 2018 tweet demanding that it shut down its electric car company. can take private.
In a filing in Manhattan federal court, Tesla accused JPMorgan of “bad faith and greed” for seeking $162.2 million after the bank unilaterally changed the terms of the warrant it received when Tesla sold convertible bonds in 2014. Was.
Tesla said, “JP Morgan presses its excessive demand as a retaliatory action against Tesla by passing over JPMorgan in major business deals and opposition from senior JPMorgan executives towards Mr. Musk.”
After receiving a “multibillion-dollar payout” from Tesla’s rising share price, by changing the terms of the warrant, JPMorgan “made itself a net profit deal,” Tesla said.
Musk is the CEO of Tesla, and according to Forbes, the richest person in the world.
JPMorgan spokesman Brian Marchioni said in an email: “There is no merit in their claim. It comes down to meeting contractual obligations.”
The countersuit escalates to a fight between the largest US bank and the world’s most valuable car company, who have done little business with each other since the disputed contract.
Warrants give holders the right to purchase a company’s stock at a specified “strike” price and date.
In its November 15 lawsuit, JPMorgan said the Tesla warrant allowed the strike price to be reduced to counter any economic impact from “significant corporate transactions” involving that company.
JP Morgan said that Musk’s August 7, 2018 tweet that he could take Tesla private and have “funding secured” followed 17 days later that its reverse course was such a transaction because it took Tesla shares. made the price more volatile.
The bank accused Tesla of defaulting because it failed to hand over shares or cash when warrants expired in June and July 2021, by which time Tesla’s share price had risen nearly 10 times.
Musk’s tweets resulted in a US Securities and Exchange Commission civil lawsuit. It ended with Musk leaving Tesla’s presidency, and he and Tesla were each fined $20 million.
Tesla’s lawsuit seeks unspecified damages.
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