Twitter won an early victory in its legal battle to force Elon Musk to complete its $44 billion acquisition after a judge sided with the social media company and set a schedule for a fast-track trial starting in October.
In her ruling, Chancellor Kathaleen McCormick of the Delaware Court of Chancery warned that the “cloud of uncertainty” hanging over Twitter’s business would grow larger in the event of a long wait for a trial.
“The reality is that the delay threatens irreparable harm to the sellers,” McCormick said, ordering a five-day trial and adding that the court had the ability to handle the expedited process.
During the hearing, Twitter’s lawyers accused billionaire CEO Tesla of “attempting to sabotage” the social media company and said a fast four-day trial was needed to prevent further damage to its business.
Lawyers for the social platform said the uncertainty over the settlement caused damage to Twitter “every hour of every day” and asked the judge to start the trial in mid-September.
Although the trial will start a little later and last a day longer than Twitter had requested, the judge’s decision is much closer to the social media platform’s request than Musk’s. His lawyers had argued it shouldn’t start until 2023 and labeled Twitter’s proposed timetable “crazy”.
After the ruling, Twitter said: “We are pleased that the court agreed to expedite this trial.” A representative from Musk’s legal team did not immediately respond to a request for comment.
On July 8, Musk announced he was pulling out of the deal to buy Twitter for $54.20 per share, claiming the company had violated the merger agreement by not sharing enough information about the fake accounts and misleading regulators on the matter.
Twitter is suing Musk in an attempt to force him to complete the acquisition. The company accuses him of repeatedly violating the terms of the merger agreement and trying to withdraw his bid because tech stocks have fallen since the deal was first struck in April.
In the first court battle between the Silicon Valley company and the world’s richest man on Tuesday, the social media group argued that Musk was hurting the business by pushing it online and disrupting operations, for example by refusing to give green light its employees. retention plans.
“It’s an attempted sabotage,” Bill Savitt of Wachtell, Lipton, Rosen & Katz, a lawyer for Twitter, said during the hearing. “He’s doing his best to destroy Twitter. He’s doing his best to create risk for Twitter, he’s doing his best to create exposure for Twitter, and he’s doing this as a way to try to get out of the contract that he promised to fulfill.”
Savitt also argued that the trial should be expedited to allow enough time for any rulings to be implemented before the settlement’s financing agreements with the banks expire in April 2023.
Musk’s team had suggested a trial start as early as February. Representing Musk, Andrew Rossman at Quinn Emanuel argued that the debate over fake Twitter accounts required a longer investigation as a “massive amount of data” and “billions of actions on their platform” would need to be analyzed.
Rossman said Twitter did not make its allegations that Musk had breached the merger agreement until after Musk had moved to terminate the deal, adding: “You can’t delay seeking relief from the court and then show up and expect to speed up .”
He also accused Twitter of giving Musk’s teams “the run around” when they asked for more information on the fake accounts, and said Musk had no incentive to damage the company given that, as the second largest shareholder big, he has a “much bigger”. economic shares” than the Twitter board itself.
Analysts have speculated that Musk may have buyer’s remorse because of the decline in tech stocks since he agreed to buy the company in April for $54.20. Its share price now stands at $39.07. The two parties could potentially renegotiate a deal at a lower price or agree to a settlement.
