Written by Tom Hals
WILMINGTON, Delaware, March 30 (Reuters) – The grand jury in Delaware’s corporate court said it will remand three cases involving Elon Musk to avoid unnecessary media attention after the billionaire businessman complained that his social media activity showed bias against him.
Chancellor of the Exchequer Kathaleen McCormick said she is rescheduling three potentially multibillion-dollar lawsuits against Musk and Tesla board members after the defendants said they supported a LinkedIn post celebrating a jury verdict against Musk in an unrelated securities fraud case.
“As should be obvious, disproportionate media attention to the judge’s handling of the case is dangerous to the administration of justice,” McCormick wrote in his letter to the legal teams in the three cases, adding that he is not biased against the defendants. He also said that the motion for his recusal was based on false facts that he said supported the LinkedIn post.
The defendants’ motion included a screenshot of a LinkedIn post made by the judge’s liaison who congratulated the legal teams leading the federal securities fraud case against Musk for “standing up for the little guy against the richest man in the world.” It showed that McCormick had endorsed the post using his personal LinkedIn account.
In a letter he wrote to the legal team last week, McCormick said he had not read the document and reported the incident as suspicious activity on LinkedIn.
The defendants say that if McCormick ends up siding with Tesla shareholders, his decision will be tainted by his “support” of people who oppose Musk.
McCormick said he would choose a time to rebuild and ordered the lawyers who requested the move to attend “to testify what they requested.”
After McCormick put his letter on the court docket, Tesla shareholder David Wagner dismissed his lawsuit. Wagner sued in 2022 alleging that Tesla’s board failed to implement a 2018 agreement with the Securities and Exchange Commission that required Musk to obtain Tesla’s approval for social media posts about the company.
Attorneys for the shareholders and the defendants did not immediately respond to requests for comment.
Musk has attacked the McCormick and Delaware courts since he ruled in 2024 to strip him of his Tesla payroll record after finding the board breached its fiduciary duty to shareholders in the approval. The Delaware Supreme Court reinstated the settlement package, worth more than $100 billion, in December.
After McCormick’s decision against Musk’s pay package, Musk led his companies including SpaceX and Tesla to re-incorporate out of Delaware. Shortly before Tesla left, several of the company’s shareholders brought legal claims against its board in Delaware Chancery Court, including lawsuits that McCormick reassigned.
McCormick is reassigning the charges as the parties wait for him to rule on the defendants’ motion to dismiss the charges before trial.
The lawsuits allege that Musk’s acquisition of Twitter, now known as iX, and his work with artificial intelligence company xAI came at Tesla’s expense. The shareholders want Musk to be ordered to divest his equity stake in xAI, among other remedies.
The defendants deny the allegations and say Tesla has thrived under Musk and that his duties were unfair to the automaker.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Matthew Lewis)
