A Delaware Court of Chancery judge has ruled that a lawsuit against billionaire Elon Musk’s attempt to back out of a $44 billion Twitter deal will begin on October 17.
why is it important
An earlier litigation could lessen the damage Twitter and shareholders could face as uncertainty around the deal drags on.
Twitter and billionaire Elon Musk will stand trial Oct. 17-21, according to the Delaware Chancery Court’s timetable confirmed Friday, over Tesla CEO’s attempt to withdraw frombuy a business.
Official calendar coming a week after Twitterdeficit due to “uncertainty” in Musk’s stormy takeover bid and 10 days after the July 19 hearing on the matter.
At the July 19 hearing, Twitter’s lawyers demanded a trial in September, while Musk’s lawyers pushed for the trial to begin at the end of February. At the hearing, Chancellor Catalyn St. Jude McCormick, the chief justice, scheduled a trial for October but did not give an exact date.
While neither Twitter nor Musk got exactly what they wanted, the shorter timeline proposed by the judge is still a win for the social media company after its lawyers raised concerns about the potential harm from Musk’s attempts to “get out” under control. to deal with.
In his speech, McCormick said that the longer a merger deal remains in limbo, the greater the risk of irreparable damage. She also noted that Musk’s lawyers seem to underestimate the court’s ability to quickly resolve complex lawsuits.
The July 19 hearing marked the first time Musk and Twitter’s legal teams clashed in court.
Musk’s lawyer Andrew Rossman said at the hearing that the billionaire needs more time to make sure less than 5% of Twitter’s 229 million daily users are fake or spam accounts. Musk’s legal team argued that the data is important to understanding Twitter’s advertising activities. Rossman said Musk is “possibly at greater risk than Twitter if he ends up being forced to buy the company” and “has no incentive to keep this suspension going for long.”
Twitter attorney Bill Savitt countered this argument and said the company indicated there were caveats in the data indicating that the number of spam accounts could be higher.
On July 8, Musk announced that he was terminating the merger agreement reached in April. July, 12,to force him to complete the purchase, and accused the billionaire of requests for information “designed to try and wreck the deal.” The company alleges in the lawsuit that the reason the billionaire wants out of the deal is because his personal fortune has plummeted, costing him a large sum to acquire the company.
In this regard, Musk filed a counterclaim on Friday. Details of Musk’s costume are being kept under wraps but may soon become public, according to the Wall Street Journal. A counterattack was expected.
Musk is also facing lawsuits from. A Twitter investor who owns 5,500 Twitter shares sued Musk on Friday, urging the Delaware Court of Chancery to enforce the merger agreement, according to Bloomberg.
Meanwhile, hedge fund Greenlight Capital acquired a new stake in Twitter in July. Several news outlets, citing a letter sent to investors on Monday, reported that the hedge fund pays an average of $37.24 per share. CNET also saw the letter.
“At this price, there is upside potential of $17/share if TWTR wins its case in court, and we think downside potential is around $17/share if the deal doesn’t go through. time,” the letter said.
Greenlight Capital added that it believes the Delaware office has an incentive to enforce the agreement.
“If this gets Musk off the hook, many future buyers will continue to remorse,” the letter says.
Sean Keane and David Lamb of CNET contributed to this report.