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BusinessTop StoriesWorld

Twitter Sues Elon Musk, Trial set for October

Twitter Inc (TWTR.N) sued Elon Musk for violating his $44 billion deal to buy the social media platform and asked a Delaware court to order the world’s richest person to complete the merger at the agreed $54.20 per Twitter share.

A Delaware court on Tuesday determined that the trial in a lawsuit brought by Twitter against Elon Musk should take place in October, granting an expedited timeline for the case.

“Musk apparently believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” said the complaint.

The lawsuit accused Musk of “a long list” of violations of the merger agreement that “have cast a pall over Twitter and its business.” It said for the first time that employee attrition has been “on the upswing” since the deal was announced.

Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform, which is fundamental to its business performance.

Twitter also accused Musk of “secretly” accumulating shares in the company between January and March without properly disclosing his substantial purchases to regulators, and said he “instead kept amassing Twitter stock with the market none the wiser.”

The scheduling decision made Tuesday — to hold the trial over five days in October — appeared to align more closely with a timeline requested by Twitter, which had sought a four-day trial in September. Musk asked the court to set a trial date no earlier than mid-February 2023.

“The reality is that delay risks irreparable harm” to Twitter, said Court Chancellor Kathaleen McCormick.

Attorneys for Musk and Twitter alleged on Tuesday that their opponents held ulterior motives for the timelines they sought.

William Savitt, an attorney from Wachtell, Lipton, Rosen & Katz, who is representing Twitter, accused Musk of delaying the court proceeding in the hope of increasing his negotiating leverage or scuttling the deal with Twitter altogether.

“The company is faced with substantial increasing risk specifically by the overhanging of the merger agreement — and it’s by design,” Savitt said.

“Mr. Musk has been and remains contractually obligated to use his best efforts to close this deal,” Savitt added. “What he’s doing is the exact opposite of best efforts. It’s attempted sabotage.”

Andrew Rossman, an attorney for Musk and a managing partner at Quinn Emanuel Urquhart & Sullivan, rebuked the claim. Instead, he argued that Twitter has sought to accelerate the case to prevent Musk and his representatives from assessing the company’s estimate in an SEC filing that less than 5% of accounts on the platform are bot or fake accounts.

 

 

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