[Update: We have since heard from Justine Musk’s attorney Marshall Zolla, who says the appeals process has already been initiated, and could last for up to a year. This contradicts what we heard from our inside source, who said the trial court judge who ruled in Mr. Musk’s favor strongly recommended against an appeal. The following post was written with information from a single source.]
Tesla Motors CEO Elon Musk has won the first round in the divorce case that surfaced last week against his ex-wife, novelist Justine Musk. We reported that the circumstances of the split raised new questions about the electric car company’s impending IPO.
According to a source close to the petititioner, the suit was dismissed, with the judge overwhelmingly favoring Mr. Musk’s position. However, it was immediately remanded to appeal. Mrs. Musk was hoping to contest a post-nuptial agreement that was signed six weeks after her marriage. She was also arguing that her ex-husband’s interest in Tesla, and his other investments, including SpaceX and SolarCity should be split as community property.
The appeals process has already been initiated, although the judge went as far as to enumerate the different ways the case could be appealed, rebutting each one in turn (according to our source). So it’s questionable how much a follow-up suit would be worth to Mrs. Musk, who has already spent a considerable amount on legal fees.
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It’s uncertain how much the divorce could have impacted Tesla’s future. If Mr. Musk’s stake in the company was split with his former wife, it could find itself in technical violation of a condition of the company’s $450 million loan from the Department of Energy, and it could unsettle the balance of power in the company’s board of directors. There have already been some investor efforts to dilute Mr. Musk’s control over the company’s direction, but they have been unsuccessful.
The company maintains that the Musks’s divorce case does not constitute a risk factor that needs to be disclosed to would-be investors in the company’s shares.
But for now, it looks like Mr. Musk has weathered yet another challenge en route to him becoming the unofficial baron of electric vehicles. He still has to navigate through a tricky IPO, considering that Tesla’s next product, the Model S, is not due to be released for two more years and analysts are already forecasting delays.
