Overview
- Chancellor Kathaleen McCormick, who leads Delaware’s corporate court, reassigned three Elon Musk–related shareholder cases to vice chancellors on Monday to avoid what she called harmful media focus on her role.
- McCormick denied using LinkedIn’s “support” reaction to a post critical of Musk and rejected a recusal bid, saying she reported suspicious account activity to LinkedIn and did not harbor bias against the defendants.
- The reassigned matters are derivative suits that let shareholders sue on Tesla’s behalf, including claims that Musk diverted talent and opportunities to X and xAI and that directors granted excessive pay, with remedies sought such as disgorgement of xAI equity.
- Hours after her letter hit the court docket, Tesla shareholder David Wagner dismissed his separate suit that alleged the board failed to enforce an SEC agreement governing Musk’s company‑related posts.
- The cases continue under new judges as parties await rulings on dismissal requests, against the backdrop of McCormick’s 2024 decision voiding Musk’s Tesla pay package that the Delaware Supreme Court reinstated in December 2025 and of Musk steering companies to reincorporate outside Delaware.