Amazon Asks Delaware Court To Reject Stock Lawsuit Over Kuiper Satellite Launch Contract
Amazon.com submitted a request to the Delaware court to reject a lawsuit filed by shareholders regarding the company's Kuiper satellite launch contract. They argued in a document that the plaintiffs failed to prove that the board of directors acted in bad faith in approving one of the company's largest capital expenditures.
Cleveland Bakers and Teamsters Pension Fund, a multi-employee fund, in August sued Amazon at the Delaware Court of Chancery on charges that Amazon's board awarded a contract to Jeff Bezos' Blue Origin space company, without carrying out adequate careful duties and without considering Elon Musk's SpaceX rival rocket.
In a refutable request document submitted to court on Monday, December 11, Amazon argued that the plaintiffs had not succeeded in showing that the board of directors acted in bad faith.
"The lawsuit is not close to putting forward the facts needed to support that extraordinary theory," Amazon said, denying its board of directors "conducting a diligent and informed review of the agreements."
Amazon targets to launch more than 3,000 satellites into low earth orbit to provide global internet coverage and compete directly with Elon Musk's more advanced SpaceX-owned Starlink network on the internet supply market from space.
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Bezos is the founder of Amazon and has served as CEO until 2021, but remains the company's executive chairman. He is also the founder and main owner of Blue Origin, the rocket launch company whose contract Amazon uses for several Kuiper satellite launches.
Amazon denies allegations of a conflict of interest with Bezos, saying he was excluded from several meetings held to consider a launch agreement with his company, Blue Origin.
Amazon launched its first two test satellites for the Kuiper network in October. To launch thousands of other satellites, the company last year announced a mass launch agreement for 83 launches - the largest ever-existing commercial rocket procurement - of various rocket companies, including Blue Origin, Arianespace from Europe, and United Launch Alliance, which are joint ventures between Boeing and Lockheed Martin.
Amazon announced earlier this month that the company had purchased three launches from SpaceX to help launch the Kuiper satellite. The plaintiffs have until February 2024 to respond to Amazon's request for rejection.