The judge in charge of the lawsuit between Twitter and Elon Musk adjourned the hearing on Thursday. She is responding to a request from the multi-billionaire’s lawyers who, hours earlier, demanded a suspension of lawsuits initiated by Twitter to force her client to abide by the acquisition agreement. They said they expect the deal to close “around October 28th.”
Elon Musk forced the California group’s board of directors to buy it back for $44 billion in April before unilaterally renegotiating its commitment weeks later. On Monday, in another twist, he finally offered to complete the transaction at the price originally agreed upon if he gets the necessary funds and Twitter drops its lawsuits.
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But after months of public attacks and a change of heart for the eccentric entrepreneur, the company demanded hard and fast proof of his seriousness. Therefore, Twitter’s lawyers earlier Thursday opposed the adjournment requested by the opposing party, calling the proposal “an invitation to more subterfuge and delay.”
Judge Kathleen McCormick finally ruled: “The trial is adjourned until 5:00 pm October 28, 2022 to allow the parties to complete the deal. If it is not concluded (by that date and time), the parties should contact me by email to get trial dates in November.
The (last) chance for Elon Musk to keep his word
The move took many observers by surprise as Twitter seemed to have the upper hand so far. Delaware law, which usually resolves conflicts of this type, promotes respect for contracts.
Elon Musk “scores a point,” notes Ann Lipton, a professor of law at Tulane University. “He clearly wanted to drag out the proceedings and avoid testifying,” which had already been postponed several times.
The judge gives him a chance to keep his word, the expert believes: “she gave him a little slack,” but if the operation is ever not completed by the deadline, “Twitter will have a stronger base to prove that he (Elon Musk) all this time was dishonest.”
Twitter no longer trusts Elon Musk
Talks between the two sides resumed earlier in the week, but they are stumbling over funding terms.
In their motion, Elon Musk’s lawyers note that “Twitter refuses to drop its lawsuits due to the theoretical possibility of future underfunding.” But “this failure at this stage did not happen,” they emphasize. “On the contrary,” the creditors pointed out, “to be ready to fulfill their obligations,” the lawyers say. “Twitter’s baseless assumptions have been debunked by the banks themselves.”
They believe that their client “agreed to do” what the company asked for. “And yet Twitter refuses to accept this positive response. Incredibly, (the company) insists on continuing the procedure, jeopardizing the deal and playing with the interests of shareholders.
The bluebird group, for their part, argued they had no reason to trust the richest man in the world. “On numerous occasions, the Musk clan has ‘failed in their commitment to do everything possible to complete the deal,'” lawyers responded to Twitter. “For several months (the opposing party) made increasingly implausible allegations with the aim of delaying the trial (…), accusations that seemed unfounded” during the preliminary hearings. “Now, on the eve of the trial, they say they want to conclude. (…) “Trust us,” they say, “this time we are serious,” social networks ridiculed.
See also: Four lessons from the fiasco of Elon Musk and Twitter
Elon Musk’s lawyers argued that the most likely outcome, in their opinion, would be “debt financing”, in which case “shareholders will get their money much faster than if Twitter wins a lawsuit and then an appeal (…) a process that can take months.”