Musk Moves to Exit 11th-Hour Delaware Lawsuit by Tesla Investors (2025)

Elon Musk is looking to end one of the final court cases confronting him in Delaware, saying the lawsuit does little more than “nitpick” his personal behavior when investors should be thanking him for their soaring stock returns.

The world’s richest man and other Tesla Inc. board members moved to dismiss the dispute, calling the legal claims “a laundry list of disagreements” that have nothing to do with fiduciary breaches or executive misconduct. The consolidated litigation involves allegations about insider trading, Musk’s acquisition of Twitter Inc., and his artificial intelligence side projects.

The shareholder suit by a group of pension funds and other investors “is long on hyperbole but woefully short on well-pled facts,” the board members said in a court filing Monday. “Yet they cannot escape the undeniable reality: Tesla has thrived under this board and CEO, delivering astronomical returns to stockholders while advancing its mission to create sustainable abundance for all.”

Musk saw his net worth balloon to greater than $400 billion after he joined Donald Trump’s second presidential administration, only to plunge as his controversial government role dragged down the Tesla brand. He was worth about $300 billion Tuesday after days of market turmoil tied to Trump’s tariffs, according to the Bloomberg Billionaires Index.

The coordinated case in Delaware’s Chancery Court stems from separate lawsuits filed against Musk just before he moved Tesla to Texas in June 2024, about six months after the court’s chief judge voided his record $56 billion pay package. With that decision now on appeal, the legal complaints filed between late May and mid-June reflect a final effort to hold Musk accountable in Delaware for his alleged wrongdoing at the automaker’s helm.

‘No Unfair Profit’

The lawsuits say Musk 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. They also say he sold billions worth of Tesla stock based on inside information while manipulating the market. Another investor suit, targeting Musk’s well-publicized illicit drug use, is proceeding separately.

Monday’s court filing assails the insider trading theories, saying they would “radically expand” legal liability in Delaware.

The corporate-opportunity allegations, meanwhile, “fail to establish that Tesla had any legitimate interest” in developing an AI chatbot that Musk steered to himself, and the other claims reflect an improper attempt to second-guess “routine business judgments that yielded no unfair profit,” according to Musk and the board.

The case involves 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 other board members named as defendants include Musk’s brother Kimbal, a son of media mogul Rupert Murdoch, and Oracle Corp. founder Larry Ellison.

The investors leading the lawsuit are represented by Prickett, Jones & Elliott PA, Lieff Cabraser Heimann & Bernstein LLP, Grant & Eisenhofer PA, Saxena White PA, the Schall Law Firm, 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 FreshfieldsUS 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, motion filed 4/7/25.