Musk’s Last Dance in Delaware Court Consolidated by Chief Judge

Elon Musk will face coordinated litigation—rather than a flurry of separate lawsuits by Tesla Inc. shareholders—over his alleged insider trades, Twitter Inc. acquisition, and artificial intelligence side projects.

A Delaware judge Monday combined multiple suits filed against Musk and other Tesla board members last spring, in the days and weeks before the world’s richest person moved its most valuable automaker to Texas. Musk, now serving as a government cost-cutting czar in Donald Trump’s second presidential administration, has a net worth of $428 billion, according to the Bloomberg Billionaires Index.

Musk shifted Tesla’s corporate home in June, five months after the chief judge of Delaware’s Chancery Court struck down his $56 billion CEO pay package. The judge in December stood by her initial ruling—defying nearly a year of social media attacks from the tech titan—and handed $345 million to the shareholder attorneys who led the litigation. The compensation case is now finally headed for appeal after a six-year drama in the elite business court.

The lawsuits filed against Musk on Tesla’s way out the door—between late May and mid-June—represent a final effort to hold Musk accountable in Delaware for his alleged wrongdoing at Tesla’s helm.

They involve claims that the billionaire stole corporate opportunities when he bought the former Twitter and started a new business, xAI, after failing to engineer a merger between Tesla and OpenAI Inc., the artificial intelligence pioneer he’s now suing. The suits also say Musk sold billions worth of Tesla stock based on inside information while manipulating the market.

The litigation is assigned to the same judge as the pay case, Chancellor Kathaleen St. J. McCormick, who said in a brief order that she’ll fully consolidate two suits filed by pension funds. Those dockets will be “initially coordinated” with a third, partly overlapping case brought by an individual Tesla stockholder, the judge said.

A fourth investor lawsuit—involving claims that Musk’s illicit drug use has threatened Tesla’s business, including by influencing his erratic behavior online—will remain separate, according to Monday’s order. McCormick is also presiding over that dispute.

The cases involve shareholder derivative claims, which are technically brought on a corporation’s behalf against its leaders. Damages in derivative cases are typically paid into a company’s coffers by its officers, directors, controlling stockholders, or insurers.

The Employees Retirement System of Rhode Island is represented by Prickett, Jones & Elliott PA and Lieff Cabraser Heimann & Bernstein LLP. The Cleveland Bakers and Teamsters Pension Fund is represented by Grant & Eisenhofer PA, Saxena White PA, and the Schall Law Firm. The individual investor, Michael Perry, is represented by deLeeuw Law LLC, Squitieri & Fearon LLP, and Moore Law PLLC.

Musk is represented by Quinn Emanuel Urquhart & Sullivan LLP. The other board members are represented by Ross Aronstam & Moritz LLP and Freshfields Bruckhaus Deringer US LLP. Tesla is represented by DLA Piper LLP (US), Sullivan & Cromwell LLP, and Richards, Layton & Finger PA.

The case is In re Tesla Inc. Deriv. Litig., Del. Ch., No. 2024-0631, 1/27/25.