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JP Morgan Chase is suing Tesla for $162 million over tweets in 2018 by Technoking Elon Musk that he would take the electric vehicle maker private.
JP Morgan accuses Tesla of “flagrantly” breaching a deal it claims should have triggered payments to JP Morgan.
JP Morgan’s suit, filed in a Manhattan federal court, says that Tesla sold warrants to JP Morgan allowing the bank to purchase shares if the “strike” price was below Tesla’s share price when the warrants expired in 2021.
“We have provided Tesla multiple opportunities to fulfil its contractual obligations, so it is unfortunate that they have forced this issue into litigation,” a spokesperson for JP Morgan said in a statement.
The warrants contained standard provisions from an ISDA agreement that allow JP Morgan to adjust the strike price to protect both parties against the economic effects of “significant corporate transactions involving Tesla,” such as an announcement the company was going private.
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