Elon Musk’s tweets mocking the Twitter lawsuit are shown on a smartphone with the Twitter logo in the background in this illustration photo taken on July 18, 2022.
CHRIS DELMAS/AFP via Getty Images
hide title
change the subtitles
CHRIS DELMAS/AFP via Getty Images
Elon Musk’s tweets mocking the Twitter lawsuit are shown on a smartphone with the Twitter logo in the background in this illustration photo taken on July 18, 2022.
CHRIS DELMAS/AFP via Getty Images
Twitter and Elon Musk are scheduled to face off in a five-day trial in October over the billionaire’s change of heart on buying the social media company for $44 billion.
The decision by Chancellor Kathaleen McCormick, the chief judge on the Delaware Court of Chancery, was a blow to Musk, whose lawyers had sought a trial early next year.
But with the Twitter deal now in limbo, McCormick agreed to expedite the trial during a hearing on Zoom on Tuesday.
“The reality is that the delay threatens irreparable harm to sellers and Twitter,” McCormick said in her ruling from the bench. “The longer the delay, the greater the risk.”
Earlier this month, the CEO of Tesla and SpaceX said he was canceling the deal due to concerns about how many Twitter accounts are fake or spam. Last week, Twitter sued Musk to force it to go ahead with the acquisition, accusing him of using the issue of automated bot accounts as a pretext to get out of a deal that was no better for him financially.
The October trial date is a win for Twitter, which had requested an accelerated four-day trial in September.
The uncertainty caused by Musk’s threat to pull out of the deal “harms Twitter every hour of every day,” Bill Savitt, Twitter’s top lawyer, said at the hearing.
Musk’s lawyers argued that they need more time to investigate his concerns over Twitter’s user numbers and that a trial should not take place before February.
Andrew Rossman, Musk’s lawyer, called Twitter’s request for a trial in September “completely unjustifiable,” saying it would take months to analyze Twitter’s data and consult with experts. He said Twitter had already dragged its feet on sharing information that Musk said was needed to verify the company’s assessments of fake accounts.
“The responses he got were alarming,” Rossman said. “The escape he took from the company was even more alarming.”
Savitt accused Musk of trying to “sabotage” the deal and run out the clock after April 2023, when the $13 billion Musk has lined up from banks to finance the deal expires.
“Mr. Musk has made it clear that he has no intention of keeping any of his promises,” Savitt said. “Frankly, we doubt that Mr. Musk wants to delay this trial long enough to never face a reckoning.”
Twitter argued that Musk’s obsession with bots is a distraction from the question facing the court: whether Musk breached his legal agreement to buy the company.
Twitter has long said it estimates that less than 5% of its daily users are not real people. Musk says he believes the true figure is much higher, but has provided no evidence for his claim that Twitter is misrepresenting the proliferation of fake accounts on the platform.
The question of how many accounts are not real people “is emphatically and clearly not before the court,” Savitt said, because it’s not part of the deal Musk signed. He called it “a fabricated matter” intended to “obscure and delay”.
Rossman countered that Twitter’s user numbers are the main issue at stake in the dispute and that the court should give Musk’s team time to dig in.
He accused Twitter of trying to “stealth prop up” its spam ratings in order to push Musk into closing the deal.
“We are pleased that the court agreed to expedite this trial,” a Twitter spokesperson said after the ruling.
Musk and his lawyers did not respond to a request for comment.
