(Reuters) – Tesla Inc. on Monday fought back against JPMorgan Chase & Co. over a disputed bond contract, countersuing the financial institution for seeking a “windfall” following Elon Musk’s notorious 2022 tweet that he usually takes his electric car company private.
In a filing in Manhattan federal court, Tesla accused JPMorgan of “bad faith and avarice” for demanding $162.Two million after the bank had unilaterally changed the terms of warrants it received when Tesla sold convertible bonds in 2022.
“JPMorgan pressed its exorbitant demand being an act of retaliation against Tesla for both it having passed over JPMorgan in main business deals and out of senior JPMorgan executives’ animus toward Mr. Musk,” Tesla said.
By changing the the warrants, JPMorgan “dealt itself a pure windfall” after receiving a “multibillion-dollar payout” from Tesla’s soaring stock price, Tesla added.
Mr. Musk is Tesla’s leader, and according to Forbes, may be the world’s richest person.
JPMorgan spokesman Brian Marchiony said in an email: “There isn't any merit to their claim. This is dependant on fulfilling contractual obligations.”
The countersuit escalates the battle between your largest U.S. bank and world’s best car company, that have done little business with one another because the disputed contract.
Warrants give holders the authority to buy company stock at a set “strike” price and date.
In its Nov. 15 lawsuit, JPMorgan said the Tesla warrants allow it to lower the strike price to counteract any economic impact from “significant corporate transactions” involving that company.
JPMorgan said Mr. Musk’s Aug. 7, 2022, tweet he usually takes Tesla private coupled with “funding secured,” accompanied by his reversing course 17 days later, was such a transaction since it made Tesla’s share price more volatile.
The bank accused Tesla of defaulting since it failed to give shares or cash when the warrants expired in June and July 2022, through which time Tesla’s share price had risen about 10-fold.
Mr. Musk’s tweets led to a U.S. Securities and Exchange Commission civil lawsuit. It ended with Mr. Musk quitting Tesla’s chairmanship, and he and Tesla each being fined $20 million.
Tesla’s lawsuit seeks unspecified damages.
