BackTesla countersues JPMorgan over contract affected by Musk tweet
Tesla accused JPMorgan of ‘bad faith and avarice’ for claiming it was owed $162.2 million after unilaterally changing the terms of warrants it received when Tesla sold convertible bonds in 2014
PremiumNEW YORK : Tesla Inc on Monday fought back against JPMorgan Chase & Co over a disputed bond contract, countersuing the bank for seeking a "windfall" following Chief Executive Elon Musk's notorious 2018 tweet that he might take his electric car company private.
In a court filing, Tesla accused JPMorgan of "bad faith and avarice" for claiming it was owed $162.2 million after unilaterally changing the terms of warrants it received when Tesla sold convertible bonds in 2014.
By changing the terms, "JPMorgan dealt itself a pure windfall," Tesla said in its countersuit filed in Manhattan federal court.
"JPMorgan pressed its exorbitant demand as an act of retaliation against Tesla both for it having passed over JPMorgan in major business deals and out of senior JPMorgan executives' animus toward Mr. Musk," it added.
A bank spokesman, Brian Marchiony, said in an email: "There is no merit to their claim. This comes down to fulfilling contractual obligations."
The countersuit escalates the battle between the largest U.S. bank and world's most valuable car company, which have done little business with each other since the disputed contract.
Warrants give holders the right to buy company stock at a set "strike" price and date.
In its Nov. 15 lawsuit JPMorgan said Musk's Aug. 7, 2018 tweet that he might take Tesla private and had "funding secured," and his abandoning that plan 17 days later, created share price volatility to justify lowering the strike price on its warrants.
JPMorgan accused Tesla of defaulting because it failed to hand over shares or cash when the warrants expired in June and July 2021, by which time Tesla's share price had risen about 10-fold.
In its countersuit, Tesla accused JPMorgan of having "put its thumb on the scale" to demand even more money, after already receiving a "multibillion-dollar payout" because of the soaring stock price.
Musk's tweets resulted in a U.S. Securities and Exchange Commission civil lawsuit that ended in $20 million fines against both him and Tesla and forced him to give up Tesla's chairmanship.
Tesla's lawsuit seeks unspecified damages.
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This story has been published from a wire agency feed without modifications to the text.
