The Delaware judge who once ordered Elon Musk’s pay package be revoked is stepping aside from several ongoing cases against him over allegations of bias.
Court of Chancery Chancellor Kathaleen St. J. McCormick announced the stunning move Monday after Musk’s lawyers accused her of having it in for the billionaire, pointing to a LinkedIn post that appeared to show her “supporting” commentary mocking him.
Musk’s nemesis said in a filing that she will reassign the group of suits to different judges but insisted she was not in fact biased against the high-profile defendant.
“The motion for recusal rests on a false premise — that I support a LinkedIn post about Mr. Musk, which I do not in fact support,” she wrote. “I am not biased against the defendants in these actions.
“But the motion for reassignment is granted,” McCormick continued. “As should be obvious, disproportionate media attention surrounding a judge’s handling of an action is detrimental to the administration of justice.
“Fortunately, the Court of Chancery is far greater than any one person.”
She said the cases would be taken over by three colleagues in Delaware’s Court of Chancery — the nation’s premier venue for corporate litigation, where judges routinely decide high-stakes disputes involving fiduciary duties and board governance for companies incorporated in the state.
Last week, lawyers for Musk demanded McCormick recuse herself because she pressed a button indicating she “supported” a post mocking Musk for being found liable for tweets he posted in 2022 about his $44 billion Twitter deal. LinkedIn’s “support” feature is similar to “liking” a post on it and other social media platforms.
Musk’s attorneys said the judge’s alleged social media activity created an unavoidable appearance of bias under Delaware law, which requires recusal where there is “any reasonable basis to question the impartiality of the trial judge.”
“I either did not click the ‘support’ icon at all, or I did so accidentally. I do not believe that I did it accidentally,” the jurist replied last week.
The litigation before McCormick involved consolidated shareholder derivative lawsuits accusing Musk and Tesla’s board of breaching fiduciary duties, including claims tied to executive compensation and broader corporate governance issues.
One of the central cases, brought by a Detroit pension fund, challenges how Tesla’s directors awarded themselves stock-based compensation, alleging the company was harmed by excessive pay and weak oversight.
The lawsuits have been combined with related claims, some of which involve Musk’s conduct surrounding the 2022 Twitter deal, creating overlap with issues raised in the recent federal case in California.
McCormick has been at the center of multiple headline-grabbing cases involving Musk, including the 2022 lawsuit that sparked him to complete his $44 billion acquisition of X, then known as Twitter, after he’d attempted to walk away from the deal.
That case was fast-tracked under McCormick’s supervision, with the judge pushing it toward a trial where she could have ordered Musk to close the transaction — a move that ultimately led the billionaire to back down and finalize the purchase just days before trial.
The relationship grew more contentious in 2024, when McCormick voided Musk’s massive Tesla compensation package, then valued at roughly $56 billion, ruling that the process was flawed and overly influenced by the CEO.
Although the Delaware Supreme Court later reversed the decision on remedy grounds, reinstating the pay package, the case intensified Musk’s criticism of the court’s home state, prompting him to publicly urge companies to incorporate elsewhere and fueling a broader debate over Delaware’s dominance in corporate law.
The Post has sought comment from Musk and McCormick.
Credit: Source link
