Tesla strikes back against JPMorgan in breach of contract case

Accused in November 2021 of not having paid the sum provided for in an agreement, Tesla replied this time to the American bank.

New round in the legal battle between Tesla and JPMorgan: sued by the bank for breaching a contract, the electric vehicle manufacturer responded by accusing JPMorgan of “bad faith and greed“.

The financial institution had filed a complaint in November, claiming $ 162.2 million from the group led by Elon Musk for not having paid him a sum provided for in an agreement between the two groups. This contract, concluded in 2014, granted the bank the possibility of buying Tesla shares at an exercise price fixed in advance and before a certain deadline (June and July 2021). JPMorgan (JPM) had however reserved the right to readjust, upwards or downwards, the exercise price in the event of unforeseen events in order to guard against excessive fluctuations in the share price. This is what the bank did in 2018 after a tweet from Elon Musk, where the leader announced his intention to withdraw Tesla from Wall Street, at a price of 420 dollars per share, which had earned him sanctions from the share of the American stock market policeman.

Tesla challenges its right to amend the contract

It is therefore the difference between the original exercise price and the revised exercise price that JPM is seeking reimbursement. But the automaker believes that the episode of Musk’s tweet was simply used as a pretext for the bank to extract money from him and contests its right to amend the contract. “JPM is seeking, through this cynical legal action, to extort an additional 9-figure windfall from Tesla through illegitimate shenanigans under the guise of an options trade“, asserts the car manufacturer in a complaint filed Monday with a federal court in Manhattan.

JPM’s attitude not only demonstrates their shameless greed, but is also in clear violation of the parties’ agreement.“Tesla continues. Tesla claims to counterattack “to remedy these violations and to hold JPM accountable for its bad faith and greed“. The company says it is claiming damages from the bank, the amount of which will have to be determined by the court. For JPMorgan, Tesla’s complaint “has no basis”. This case “concerns merely the fulfillment of contractual obligations”said a spokesperson for the establishment in an email to AFP.

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