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In April 2022, Elon Musk made a deal to purchase Twitter for $44 billion. In the months since, the world's richest man has seemed to back away from his deal, and eventually landed on the issue of spam bots on the platform as a way out.
In July, Musk claimed that Twitter hasn't "met its contractual obligations" in a letter filed by his lawyers with the U.S. Securities & Exchange Commission. However, Twitter disagrees, and filed a lawsuit in the Delaware Court of Chancery to force Musk to follow through with his purchase.
Here's everything we know about the Elon Musk-Twitter lawsuit and trial.
Twitter sued Elon Musk for violating his acquisition agreement.
The social media giant filed a 60-page suit in the Delaware Court of Chancery to force Musk to follow through with the multi-billion dollar purchase.
"In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done," the complaint states. "Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests."
Twitter continues, "having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, 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."
Twitter's argument is that Musk is pointing to the issue of bots because he has buyer's remorse over the deal.
“In his press release announcing the deal on April 25, 2022, Musk raised a clarion call to ‘defeat the spam bots.’ But when the market declined and the fixed-price deal became less attractive, Musk shifted his narrative, suddenly demanding ‘verification’ that spam was not a serious problem on Twitter’s platform, and claiming a burning need to conduct ‘diligence’ he had expressly forsworn,” Twitter wrote.
The trial is set for October 2022.
Twitter's lead counsel William Savitt argued for an expedited trial, saying the uncertainty over the purchase is harming the company."Musk has been and remains contractually obligated to use his best efforts to close this deal," Savitt said. "What he's doing is the exact opposite; it's sabotage."
Twitter stated in their filing, "Millions of Twitter shares trade daily under a cloud of Musk-created doubt. No public company of this size and scale has ever had to bear these uncertainties."
Musk's team tried to argue that the trial should be set for February 2023. "We're not opposing expedition full stop, we're not asking for years here," Musk lawyer's Andrew Rossman said. "What we're offering instead, Your Honor, is an incredibly rapid and sensible schedule."
Delaware Court of Chancery chancellor Kathaleen St. Jude McCormick ruled in favor of Twitter. "The reality is that delay threatens irreparable harm [to Twitter] ... the longer the delay, the greater the risk," the judge said in her ruling.
We'll update this post as more information becomes available.
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