Investment bank JP Morgan filed a complaint against Tesla late Monday alleging the electric car company owes the firm over $162 million.
The complaint centers on stock warrants, financial instruments allowing a buyer to purchase shares at a set price within a certain length of time, that JP Morgan bought from Tesla in 2014. The two firms agreed to a “strike price” at the time of purchase, and they agreed that if Tesla’s share price exceeded the strike price within the agreed-upon length of time, the electric car company would have to give JP Morgan stock or cash equivalent to the difference in prices, JP Morgan said in the complaint.
However, following a tweet from Elon Musk regarding Tesla’s financial future and a failed bid to take the company private, JP Morgan decided to lower the strike price, which they argued in the complaint was their right due to the terms of their contract with Tesla. The electric car company protested the adjustment, as the lower strike price meant JP Morgan would be entitled to more money if Tesla’s share price rose.
JP Morgan alleged that Tesla breached the terms of the contract by failing to pay when Tesla’s share price exceeded the strike price.
“Even though JPMorgan’s adjustments were appropriate and contractually required, Tesla has refused to settle at the contractual strike price and pay in full what it owes to JPMorgan,” the bank alleged in the complaint.
JP Morgan said that Tesla provided fewer shares to the bank than were necessary under the contract. Tesla did not immediately respond to the Daily Caller News Foundation’s request for comment.
“Tesla is in flagrant breach of its contractual obligations. As a result, more than $162 million is immediately due and payable to JPMorgan by Tesla,” JP Morgan said in the complaint.
The bank alleges that Tesla failed to deliver 228,775 shares of its common stock, and it is asking for legal fees on top of the $162 million.
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