JPMorgan Chase Bank, National Association, London Branch, has responded to the Counterclaim brought by Tesla Inc in a lawsuit concerning an Elon Musk tweet from August 2018.

This is a breach of contract action to recover over $162 million allegedly immediately due and payable by Tesla to JPMorgan. JPMorgan and Tesla entered into a series of warrant transactions, which required Tesla to deliver either shares of its stock or cash to JPMorgan if, at the time the warrants expired, Tesla’s share price was above the contractual “strike price.”

The warrants did expire with Tesla’s share price above that strike price. JPMorgan demanded the due shares or cash, but Tesla has ignored the demand. JPMorgan has brought this action to enforce its right to payment.

On August 7, 2018, Tesla’s CEO Elon Musk announced what JPM sees as a significant corporate transaction via Twitter. He tweeted “Am considering taking Tesla private at $420. Funding secured.”

JPMorgan had to adjust the strike price. Tesla has refused to settle at the contractual strike price and pay in full what it owes to JPMorgan. As a result, JPM claims that more than $162 million is immediately due and payable to JPMorgan by Tesla.

In January 2022, however, Tesla responded to the claims made by JPM and filed a counterclaim against the plaintiff. According to Tesla, “JPM’s manipulation of the Strike Price was entirely self-serving and in breach of the parties’ agreement”.

Now, JPMorgan has responded to Tesla’s counterclaim. The relevant documents were filed with the New York Southern District Court on February 21, 2022. JPMorgan raises 17 affirmative defenses against Tesla’s counterclaim:

• FIRST DEFENSE Tesla’s claims fail, in whole or in part, because there was no breach of the Agreements.
• SECOND DEFENSE Tesla’s claims fail, in whole or in part, based on the terms of the Agreements.
• THIRD DEFENSE Tesla’s claims fail, in whole or in part, because Tesla is in breach of the Agreements.
• FOURTH DEFENSE Tesla’s claims are barred, in whole or in part, under the doctrines of unclean hands, unjust enrichment, and/or other related doctrines and principles.
• FIFTH DEFENSE Tesla fails to state a claim upon which relief can be granted.
• SIXTH DEFENSE Tesla is not entitled to the relief it seeks under the Agreements.
• SEVENTH DEFENSE Tesla’s claims for damages are barred, in whole or in part, because Tesla did not suffer any legally cognizable injury or damages as a result of any alleged breach.
• EIGHTH DEFENSE Tesla’s claims are barred, in whole or in part, under the voluntary payment doctrine.
• NINTH DEFENSE Tesla’s claims are barred, in whole or in part, under the doctrines of estoppel, waiver, acquiescence, laches, and/or other related doctrines and principles.
• TENTH DEFENSE Tesla’s claims for damages are barred, in whole or in part, because any alleged damages, which JPMorgan denies, are speculative, remote, conjectural, and without basis in law or fact.
• ELEVENTH DEFENSE Tesla’s claims are barred, in whole or in part, by the doctrines of avoidable consequences and/or mitigation of damages.
• TWELFTH DEFENSE Tesla’s claims for prejudgment interest should be dismissed because the amount of damages (if any) was not readily ascertainable at the time its Counterclaim was filed.
• THIRTEENTH DEFENSE Tesla is not entitled to the recovery of attorneys’ fees, costs, and other out-of-pocket expenses.
• FOURTEENTH DEFENSE Tesla’s claims are barred, in whole or in part, by the doctrines of setoff and recoupment.
• FIFTEENTH DEFENSE Tesla’s claims are barred, in whole or in part, by the doctrine of pari delicto.
• SIXTEENTH DEFENSE Tesla’s claims are barred, in whole or in part, by the doctrine of ratification.
• SEVENTEENTH DEFENSE Tesla’s claims are barred, in whole or in part, by the applicable statutes of limitations and repose.

JPMorgan requests that the Court:

• a. Render judgment that Tesla take nothing by this suit;
• b. Dismiss Tesla’s Counterclaim with prejudice;
• c. Grant judgment against Tesla on JPMorgan’s breach of contract claim and award JPMorgan its damages; and
• d. Grant any other just and proper relief to which JPMorgan may be entitled.