Tesla’s law firm helps to write legislation that some experts, as the $ 55B payment package of Musk could restore

A law firm that represents Elon Musk and Tesla helped write legislation to review the Corporate Law of Delaware in the middle of an ongoing judicial battle on the Musk multimillion -dollar compensation package of its electric car company, familiar sources with the Subject confirmed to ABC News.

The proposed state legislation would amend the Law of the General Corporation of Delaware to relieve the rules that determine if a shareholder is considered a “controller”, a designation that prevented Musk from receiving a compensation plan of up to $ 55.8 billion Tesla the year past.

Musk lost his compensation package, according to reports, the largest CEO compensation plan in the history of the public corporation, after being recognized as a “controller” of Tesla even though he had less than a third of the actions of the company.

According to the existing law, the shareholders below the threshold of one third still receive the classification of “controller” if they exercise other controls. In contrast, the proposed law would establish the requirement that a shareholder has at least one third of a company’s shares to be considered a “controller.”

Legal experts are divided into whether the proposed legislation, if promulgated, could affect the Tesla Musk compensation package currently under appeal before the State Supreme Court, a dispute point that has arisen from the fact that the bill It lacks an explicit mention that prohibits its application to the slope of cases.

The law firm that represents Musk and Tesla, Richards, Layton & Finger, confirmed to ABC News its participation in the writing of the legislation. The firm said the legislation, if promulgated, would not be retroactive and suggested that it would not affect Musk’s case.

The firm also said that its role in the process “was not on behalf of or influenced any firm client,” emphasizing that it was among a group of lawyers, teachers and experts who helped write the proposal and that the firm has played a Main role in the configuration of the commercial statutes of Delaware for more than 125 years.

“As many have recognized, legal changes are necessary to restore the central principles that have been the distinctive seal of Delaware for more than a century and ensure that Delaware remains the preeminent jurisdiction for incorporation”, Richards, Layton, Layton & Finger President Lisa Schmidt wrote in a statement to ABC News.

The sponsor of the bill, the state democratic senator of Delaware, Bryan Towsend, echoed the claim and told ABC News that the bill “is not retroactive and would not affect the litigation with respect to the Elon compensation package Musk in Tesla “.

Towsend also emphasized that a Richards lawyer, Layton & Finger was invited to advise on the legislation as an expert of the industry and member of the Law Council of the Corporation of the Law Association of the State of Delaware, together with many other experts, and that the legislators were totally responsible for the final draft of the final of the bill.

But other legal experts told ABC News that the proposed law could allow the Delaware Court to revert its decision and give MUSK the payment package.

The bill lacks an explicit mention that prohibits the application to pending cases, which makes possible a court that alters the result of Musk’s case, legal experts said.

“It is possible,” said Saath Sanga, a professor of corporate law at Yale University, on the potential use of the proposed law to revive the Musk payment package. “There is nothing in the law that requires it and there is nothing that avoids it.”

Ann Lipton, a law professor at the University of Tulane, said that the absence of any stipulation that prevents application to pending cases could function as a sign for the court to reverse her decision about Musk’s salary.

“He sends a strong signal to the Supreme Court of Delaware that we want to interpret this to return his payment package to Elon,” Lipton said.

The law professor at Boston, Brian Quinn, said it is not clear if the legislation will be retroactive or not, but added: “It is completely possible that the court reverses the opinion of the trial for reasons not related to this amendment, and The package is restored. “

Foreign Minister Kathaleen McCormick, who supervises the Court of First Instance of Delaware that manages commercial litigation, rejected the 2018 compensation package that Tesla voted to provide Musk.

McCormick discovered that the negotiations surrounding the package had been inappropriate, due to the lack of independence between the members of the Board and the influence of Musk on the negotiations.

The changes proposed to the law could relieve the scrutiny applied to Musk, resulting in a reversal of the court ruling, some experts told ABC News.

The proposed law avoided a typical consideration process before the Corporate Law Council, a section of the Delaware Bar Association, Sanga said. He said he could not remember an instance in which a change proposed to the Corporate Law of Delaware did not go through that process.