Jonathan Stempel

NEW YORK (Reuters) – Tesla (NASDAQ:) Inc on Monday fought back against JPMorgan Chase & Co (NYSE:) over a disputed bond contract, countersuing the bank for seeking a “windfall” following Chief Executive Elon Musk’s notorious 2018 tweet that he might take his electric car company private.

Tesla filed a lawsuit against JPMorgan alleging “bad faith” and “avarice” in claiming $162.2million owed to it for unilaterally changing warrant terms it had received after Tesla purchased convertible bonds in 2014.

Tesla claimed that JPMorgan changed the terms and received a “pure windfall” in its countersuit, filed at Manhattan federal court.

It added that JPMorgan made its outrageous demand in retaliation to Tesla for having taken JPMorgan out of major business deals, and because of the animus of JPMorgan senior executives toward Mr. Musk.”

Brian Marchiony from the bank responded to an email saying that their claims were without merit. It comes down to meeting contractual obligations.

This countersuit intensifies the conflict between America’s largest bank and the world’s most important car manufacturer. They have not done business together since the dispute.

Holders of warrants have the option to purchase stock from the company at a specified “strike price” and on a specific date.

In its Nov. 15 lawsuit https://www.reuters.com/business/autos-transportation/jpmorgan-sues-tesla-162-mln-related-warrants-2021-11-15, JPMorgan said Musk’s Aug. 7, 2018 tweet that he might take Tesla private and had “funding secured,” and his abandoning that plan 17 days later, created share price volatility to justify lowering the strike price on its warrants.

JPMorgan accused Tesla that it defaulted because it didn’t hand over any shares or cash after the warrants expire in June and July 2021. Tesla’s share prices had increased about 10-fold by then.

Tesla made a countersuit accusing JPMorgan that it had “put its thumbs on the scale” and demanded more money. This after receiving a “multibillion dollars payout” due to its stock price explosion.

Musk’s tweets led to a civil suit by the U.S. Securities and Exchange Commission that resulted into $20 million in fines for him and Tesla and required him to resign as chairman of Tesla.

Tesla sued for unspecified damages.