Metal drummer cost Elon Musk R$277 billion – 02/03/2024 – Market

Elon Musk suffered one of the biggest legal losses in US history this week when he was stripped of a $56 billion compensation package for Tesla’s performance in a case brought by an unlikely opponent, a former heavy metal drummer.

Richard Tornetta sued Musk in 2018, when this Pennsylvania resident owned just nine Tesla shares. The case ended up going to trial at the end of 2022 and, on Tuesday (30), a judge ruled in Tornetta’s favor, nullifying the huge remuneration agreement as he considered it unfair for him and all other shareholders of the car manufacturer. electrical.

When contacted by Reuters, Tornetta could not be reached for comment and his lawyer declined to comment.

Until the Tornetta case, Musk had prevailed in a series of trials accusing him of defamation, breaching his duty to shareholders and violating securities laws.

Based on his online presence, Tornetta appears to be more interested in creating audio equipment for car customization enthusiasts than fighting corporate excesses and misconduct.

He posted light-hearted videos about gadgets he created or accidents, including descriptions of burning off his eyebrows.

Tornetta also appears in videos playing drums at the legendary former New York club CBGB with his now-defunct metal band “Dawn of Correction”, who described their sound as “a quick kick to the face with a steel-toed work boot”. .

On social media, fans of Tesla and Musk seemed to consider the case an injustice and speculated about Tornetta’s intentions and political affiliations, asking how an investor with such insignificant stakes could wield so much power.

Delaware corporate law is full of cases naming individual investors with small equity stakes who ended up shaping U.S. corporate law.

Many law firms that represent shareholders maintain a group of investors with whom they can work to bring cases, says Eric Talley, who teaches corporate law at Columbia Law School. They can be pension funds with a wide range of equity holdings, but they are also often individuals like Tornetta.

The plaintiff signs documents to file the lawsuit and usually walks away, Talley says. The investors do not pay the law firm, which takes on the case on a success fee basis, as the lawyers did in the Musk case.

Tornetta benefits from winning the case in the same way other Tesla shareholders benefit: by saving the company billions of dollars that a subservient board of directors paid Musk.

Business groups have long criticized cases brought by individuals as indicative of potentially abusive litigation. Ten years ago, Delaware was beset by lawsuits led by retail investors who owned some shares and challenged merger agreements. Cases were often resolved quickly with paltry settlements that always included payments to the lawyers who brought the cases. Delaware judges and legislators eventually restricted the practice.

Experts said people like Tornetta are essential to overseeing boardrooms. Lawmakers and judges have long wanted large investment firms to lead such corporate litigation, as they are better equipped to monitor their lawyers’ tactics. But experts said fund managers don’t want to risk relationships on Wall Street.

So, it was up to Tornetta to face Musk.

“His name is now etched in the annals of corporate law,” Talley said. “My students will be reading Tornetta vs. Musk for the next ten years.”