Tesla’s Twitter deal dispute with JPMorgan extended again

JPMorgan claims it’s owed more than $160 million by Tesla, alleging the EV maker is trying to give the wrong impression about how it owes it for litigation expenses stemming from a tweet Elon Musk posted from the company’s Twitter account in September.

The company says it’s owed more than $162 million, and not about a tiny $78,000, according to documents filed on Wednesday in a California federal court.

Tesla appears to be going out of its way to leave room for doubt that it still owes the money. The company has declared in official filings and in court papers that the $82 million penalty imposed for breaking the terms of a nondisclosure agreement in its September tweet still stands. That is the figure the Wall Street giant was seeking in that legal dispute.

While it doesn’t say in those filings that it is still owed $82 million, Tesla still says in its 2016 regulatory filings that it has paid $78 million, including interest.

The docket in the federal court case shows that two of those filings referenced the same counterclaim filed in September by JPMorgan against Tesla. As with the other $82 million in amounts on which Tesla has refused to settle, it argues that there’s “no basis” for Tesla to contend it was ordered to pay because of the Twitter post by Musk that is now deemed to be in violation of the nondisclosure agreement that Tesla had with the financial giant.

Musk admitted that he posted a 6:38 a.m. tweet in September that stated he had acquired the rights to transform California’s public school system by building thousands of Teslas in schools and selling them to fund school construction.

New York real estate investor Peter Peterson sued Tesla that day in California federal court, saying he was expecting a much bigger windfall from the “Tesla Deal” he had orchestrated to accelerate expansion of the EV maker’s California-based engineering and manufacturing facilities.

Since then, Tesla has changed its mind and scrapped the “deal” with Peterson. Tesla now says it has no use for Tesla shops in Los Angeles and Austin, Texas, where Peterson wanted to build them.

Tesla didn’t immediately return a request for comment on the court filings.

With the exception of those filings, Tesla has stated publicly that it has settled the legal dispute with JPMorgan and other banks and corporations that received hundreds of millions of dollars in loans during and after the auto maker’s near-death experience in 2010.

Musk was forced out of the company in June of that year, which the stock market blamed on the chief executive’s aggressive plans for a switch from regular gasoline cars to an electric fleet that could produce, charge, and market vehicles in a more predictable way. The stock market imploded, wiping out more than $20 billion in the company’s value.

Since then, Tesla has surged from about $45 a share to more than $379 a share as investors have taken another look at the company’s prospects and validated Musk’s vision for the EV maker.

As a prelude to the initial public offering of his other company, SpaceX, Musk promised investors that the automaker would prosper when rocket transportation soared far beyond what was previously possible in space travel.

Get the Monitor Stories you care about delivered to your inbox. By signing up, you agree to our Privacy Policy

About two months before he made that promise, Musk tweeted that he was acquiring the rights to a California public school system in a deal that would enable the EV maker to construct thousands of “Tesla education centers” where students could learn the “necessary skills for a lifetime of Tesla ownership.”

This story was reported by The Associated Press.

Leave a Comment