By Tom Hals
WILMINGTON, Delaware, March 30 (Reuters) – The chief judge of Delaware’s corporate court said she will reassign three cases involving Elon Musk to avoid unnecessary media attention after the billionaire businessman complained that his social media activity had shown bias against him.
Chancellor Kathaleen McCormick of the Court of Chancery said she was reassigning three cases against Musk and Tesla board members potentially worth billions of dollars after the defendants said she supported a LinkedIn post celebrating a jury verdict against Musk in an unrelated securities fraud case.
“As should be obvious, disproportionate media attention surrounding a judge’s handling of an action is detrimental to the administration of justice,” McCormick wrote in his letter to the legal teams in all three cases, adding that he had no bias against the defendants. He also said the recusal motion was based on the false premise that he supported the LinkedIn post.
The defendants’ motion included a screenshot of a LinkedIn post by a jury consultant congratulating the legal teams leading a federal securities fraud case against Musk for “defending the little guy against the richest man in the world.” It showed McCormick had supported the post using his personal LinkedIn account.
In a letter to legal teams last week, McCormick said he had not read the post and reported the incident as suspicious activity to LinkedIn.
The defendants said that if McCormick ultimately sided with Tesla shareholders, his ruling would be overshadowed by his “support” for people standing up to Musk.
McCormick said he would select a time for the reassignment to take place and ordered the attorneys who requested the move to “attend to “testify to what they requested.”
After McCormick published his letter in the court docket, Tesla shareholder David Wagner dismissed his case. Wagner filed a lawsuit in 2022 alleging that Tesla’s board of directors failed to enforce a 2018 agreement with the Securities and Exchange Commission that required Musk to obtain Tesla’s approval for social media posts about the company.
Lawyers for the shareholders and defendants did not immediately respond to requests for comment.
Musk has attacked the McCormick and Delaware courts since their 2024 ruling that stripped him of his record Tesla pay package after he found the board “breached its fiduciary duties to shareholders by approving it.” The Delaware Supreme Court reinstated the pay package, valued at more than $100 billion, in December.