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The Divorce of Elon and Justine Musk heats up!
Who they are: Elon and Justine Musk are a married couple who are in the midst of a contentious divorce. Justine, according to her Wikipedia profile, was born Jennifer Wilson in 1972 in Peterborough, Ontario, Canada and is the author of Blood Angel, Lord of the Bones and Uninvited. Elon is South African born and is a super successful entrepreneur. His is the original founder of Paypal and a number of other successful companies such as Tesla Motors, Space X and Solar City. They have five sons.
Where they live: The couple reside in Bel Air, California.
Divorce back story: The story of Elon and Justine’s divorce broke back in 2008 when Justine wrote on her blog Moschus Writes: Notes from a Novelist’s life in Bel Air: “I am getting divorced. We had a good run. We married young, took it as far as we could and now it is over. That’s about all I can say for now, other than that it was a very sad and very necessary decision.” No one is absolutely sure why this marriage broke up. But Mr. Musk is already engaged to British actress Talulah Riley. All the blogs, like Gawker and others went crazy. Gawker posted the following at the time of Ms. Musk’s blog announcement:
Until Justine threw him out this summer, the couple lived in a Bel Air mansion with their five children. Los Angeles is clearly a better locale for Justine to pursue her writing career. Tesla is based in the Bay Area. Word swept the Tesla office of a pending divorce after Elon showed up to the opening of Tesla’s Menlo Park showroom with a “twentysomething actress,” one attendee said. How he managed to pursue an affair while meddling in the affairs of Tesla and his other company, space-exploration startup SpaceX can only speak to Musk’s off-the-charts time-management skills. His decision to fire Tesla’s CEO and take over the job himself just means more time away from his family. Only Elon and Justine know all the reasons why they are divorcing. And which came first — did Elon decide to throw himself into his work after realizing his marriage was a failure, or did his obstinate workaholism jeopardize his marriage?
State with Jurisdiction over this divorce: Even though neither is American, they are residents of California so obviously California is the state with jurisdiction over these divorce proceedings. Neither party is contesting jurisdiction. And the grounds are “irreconcilable differences.”
Status of the case as of today: Well, Justine’s blog is great because it highlights and updates and informs in a way that is highly unusual for a party in a divorce action. She gives such in depth (and great information) that you worry that she is a step away from sharing too much and violating confidentiality rules, if any, and/or giving the other side too much information. But yesterday, she had this to say about her day in court:
: the less powerful partner was pressured or coerced) and renders the agreement invalid. Because of mediation confidentiality, however, “undue influence” can’t be applied to my case.ie agreement is regarded differently than a prenuptial agreement. If the agreement is extremely one-sided — if one partner gives up as much as I did without getting something equal or nearly equal in return — then the law decides that “undue influence” took place (postnuptial* Mediation confidentiality also swallows up something called “undue influence”. Because of the relationship between husband and wife — and the highest standard of fiduciary duty that they owe each other — a
The judge did something so unusual that everyone was blindsided.
He basically instructed my ex-husband’s side to motion for a nonsuit (so unusual in family court they hadn’t thought of it themselves), then granted it and read a massive statement that he had prepared beforehand. In other words, there was no actual trial, and the judge came to court with his ruling already decided.
My ex-husband won the day due to a technicality.
The judge then made very clear that he would certify the case for immediate appeal and send it up to appeals court, which has a power that superior court (his court) does not: the power to change the law. He also admitted that he was “not certain” about some of his legal conclusions resulting in his decision.
(It was later explained to me that if there had been a factual trial, and my ex-husband had won because of those same procedural issues, then I would have had little chance for an appeal.
Instead, as my lawyer told me, “This is just beginning.”
“You mean after two years,” I said, “it’s just beginning.”
He said, “The law moves slowly.”)
The immediate appeal means that my ex-husband’s assets remain frozen (he has to get my permission to sell stock or move things around).
The judge also told my ex in no uncertain terms that he would have to continue paying my legal fees. My ex is not happy about this. The law states that both parties are entitled to adequate defense, and if one party can’t pay (that would be me) — and the other party can (that would be him) — then the latter party is responsible for the fees. The case has already cost my ex-husband several million dollars (and my lawyer and his lawyer have been in court over this issue several times).
“This case is far from over,” the judge declared. “Things might not have gone her way today, but the outcome of this case is still unpredictable….and there are” as he stared pointedly at my ex-husband “hundreds of millions of dollars at stake .”
(This part, by the way, happened after lunch. I suspect it was during lunch when “a source close to Mr Musk” contacted Venturebeat and told them that he had already won the case and an appeal was “unlikely”.)
The judge also commended — repeatedly — the “excellent lawyering” that had taken place on both sides in the two years leading up to this trial, “the best that I have seen”.
The irony of this whole thing is that I don’t want hundreds of millions of dollars . I think my ex-husband is brilliant and works like a demon and deserves his success and his wealth. But I also think — after eight years of marriage and six kids (five surviving) — that I am entitled to a fair settlement, which does include a small piece of “community” property (other than the house, which is mine, and it is a lovely house, and I am so stupidly privileged that it’s ridiculous, and this whole thing is surreal). My ex-husband and I remain in serious disagreement as to what “fair” is, and we also remain in serious disagreement about certain issues surrounding the postnup.
As always, I hope for resolution in near future.
document I signed shortly after my marriage. The case has to do with fraud, basically — what was disclosed, what wasn’t disclosed, what was misrepresented, and whether or not this misrepresentation is protected by mediation confidentiality.*postnuptial Monday I was in court because of my divorce and an extremely harsh
What does Venturebeat have to do with it?: Venturebeat is this NYT-recognized blog that “provide news about innovation for forward-thinking executives.” It seems that sources close to the Musks have routinely been feeding information about the Musk divorce to this website and so they have become a go-to source for updates about the Musk divorce. Arguably, Venturebeat skews slightly towards Mr. Musk in their coverage. Commenters on other blogs seem a bit harsh towards Justine (they are trying to paint her as the proverbial and insulting “gold-digger.”) Nonetheless, Venturebeat is a great source of backstory information as it pertains to the financial issues in the Musk divorce. Mrs. Musk, understandably, wants her fair share of the value of her husband’s businesses and other community property. But this lawsuit comes at an inopportune time, ostensibly, given that Mr. Musk has a pending IPO for his car company, Tesla Motors, which would be impacted if his wife gets 50% of his business assets. Of course, there is a post-nuptial agreement that would limit her reach to considerably less than a 50% interest. She is contesting that post-nup on the basis of fraud.
Wikipedia on Tesla Motors:
Musk is perhaps most famous for his role at Tesla Motors, where he was a co-founder and the company’s sole product architect and chairman of the board. First investing in April 2004, he led several rounds of financing, and became CEO in October 2008. Tesla Motors builds an electric sports car, the Tesla Roadster, and plans to produce a more economical four door electric sedan.Musk is principally responsible for an overarching business strategy that aims to deliver affordable electric vehicles to mass-market consumers. His vision was to create the Tesla Roadster as a means to that end—a car aimed specifically at affluent early adopters, who would then buy the sports car and subsidize the research and development costs of lower priced models of electric vehicles. From his earliest involvement with the company, Musk has been a champion of the Model S, a four-door family sedan with an anticipated base price of half that of the Roadster. Musk has also favored building a sub-$30,000 subcompact and building and selling electric vehicle powertrain components so that other automakers can produce electric vehicles at affordable prices without having to develop the products in house.Several mainstream publications have compared him with Henry Ford for his revolutionary work on advanced vehicle powertrains.
Venturebeat on the IPO:
It’s uncertain how much the divorce could have impacted Tesla’s future. If Mr. Musk’s stake in the company was split with his former wife, it could find itself in technical violation of a condition of the company’s $450 million loan from the Department of Energy, and it could unsettle the balance of power in the company’s board of directors. There have already been some investor efforts to dilute Mr. Musk’s control over the company’s direction, but they have been unsuccessful. The company maintains that the Musks’s divorce case does not constitute a risk factor that needs to be disclosed to would-be investors in the company’s shares. But for now, it looks like Mr. Musk has weathered yet another challenge en route to him becoming the unofficial baron of electric vehicles. He still has to navigate through a tricky IPO, considering that Tesla’s next product, the Model S, is not due to be released for two more years and analysts are already forecasting delays.
Pendente Lite orders in place: Justine has exclusive occupancy of the marital home. She has physical custody of the five boys. Assets are frozen. That was a good move by Justine and her attorneys. That is not to say that Elon would have “dissipated the marital assets” or even that he would have hid assets, but it is always smart to get a freeze from the outset and Justine’s team did that. For sure, he’s paying spousal support and child support pendente lite. And he’s also paying attorney’s fees. According to Justine, Elon has to pay her legal fees and he’s paid out millions already between his lawyer and hers. Why would he want to drag this out longer and take this to appeal? Why not try to reach a fair settlement with Justine rather than give more money to lawyers and to the legal system? That doesn’t make a whole lot of sense, especially since Elon is an entrepreneur and understands about money.
The Appeal: They are fighting over what is “fair” in Justine’s own words and she is contesting the post-nup (agreement between spouses that is entered into after the marriage, as compared to a pre-nup which is entered into before the marriage.) The 6 or 8 year marriage produced 6 kids and Justine feels that California community property entitles her to at least 10% of their net worth. The issue though is whether the post nup if enforceable. By appealing, what is she trying to achieve? To say to the appellate court that a post-nup that is “one-sided” should be void on its face? We are not quite sure what the basis of the appeal is. We’ll look into this further and do a follow up with another post soon.