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Leo Group, Tomales Bay Agree in Principle to Settle $2.5 Billion SpaceX Suit

Published: Nov. 5, 2026 2:13 a.m. GMT+8

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SpaceX made its Nasdaq debut in June 2026, with its market capitalization briefly approaching $3 trillion.Photo: VCG

China’s Leo Group and U.S. private investment firm Tomales Bay Capital have agreed in principle to settle a lawsuit seeking more than $2.5 billion over a failed investment in SpaceX.

The parties notified a federal court in Northern California of the agreement ahead of an Oct. 30 hearing on Leo’s motion to dismiss the case. The judge issued a dismissal order on Oct. 29. Settlement terms were not available, and neither company responded to Caixin’s requests for comment.

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China's Leo Group and Tomales Bay Capital agreed to settle a lawsuit seeking over $2.5 billion over a failed SpaceX investment.
SpaceX blocked the deal due to Chinese ownership; a Delaware court earlier awarded Leo only $1 in nominal damages.
Settlement terms were undisclosed; competing claims over disclosure obligations remain unresolved.

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Who’s Who

Leo Group: Leo Group, a Shenzhen-listed Chinese pump maker that expanded into digital marketing, agreed to settle a $2.5 billion lawsuit with U.S. firm Tomales Bay Capital over a failed SpaceX investment. A Delaware court had found Tomales breached candor but awarded Leo only $1 in damages. Settlement terms were undisclosed.

Tomales Bay Capital: Tomales Bay Capital is a U.S. private investment firm that managed a fund seeking to buy SpaceX shares. It removed Chinese investor Leo Group from the fund in 2021 after SpaceX objected. Tomales later sued Leo for over $2.5 billion, but the parties agreed to settle in 2026, with terms undisclosed.

SpaceX: According to the article, SpaceX refused to approve a share purchase while Chinese investor Leo Group remained involved, with CFO Bret Johnsen citing concerns over Chinese investment, scrutiny of SpaceX's U.S. government work, and potential CFIUS review. This led to Leo's removal from a Tomales Bay Capital fund, sparking legal disputes.

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What Happened When

June 12, 2026：: Tomales filed its California lawsuit against Leo, seeking more than $2.5 billion.

October 29, 2026：: The judge issued a dismissal order in the California case.

October 30, 2026：: Hearing on Leo’s motion to dismiss was scheduled; parties notified court of settlement agreement in principle before this date.