This article is more than 1 year old
Judge approves Twitter's request to hurry along Musk trial to October
Cutting Elon story short
The Twitter vs Elon Musk trial is set to start in October after a judge granted the social network's request to speed up legal proceedings.
Twitter sued the Tesla supremo last week, accusing him of breaching the terms of his offer to buy the website. Musk promised to take over the biz for $44 billion in cash, by offering $54.20 a share for Twitter stock, and is now trying to wriggle out of the deal without meeting his obligations, it was alleged.
The tech tycoon, who waived the need for any due diligence, had planned to secure those billions by taking out loans from banks, getting help from his rich peers, and selling a chunk of his Tesla shares. However, the stock market took a dive amid economic anxiety and a drop in confidence.
His Tesla shares are now worth a lot less, making the acquisition more and more expensive for him. Musk began backing away from the deal, publicly accusing Twitter of not being truthful about the number of fake bot accounts on its platform. Twitter denies any wrongdoing, and wants the world's richest man to either cough up the money for its shares – or pay the $1 billion break-up fee he owes for quitting the deal.
This isn't just a polite request: Twitter, which believes it has had its reputation unfairly trashed and has been financially damaged by Musk's public statements against the biz, has taken the matter to court in Delaware, and asked the judge to hurry up proceedings. The biz is seeking damages as well as any money owed.
"Expedition is essential to permit Twitter to secure the benefit of its bargain, to address Musk's continuing breaches, and to protect Twitter and its stockholders from the continuing market risk and operational harm resulting from Musk's attempt to bully his way out of an airtight merger agreement," the company's legal team argued in court documents [PDF].
The acquisition agreement between both parties expires on October 24. That might explain Twitter's eagerness to see this done and dusted sooner rather than later – Twitter wanted a four-day September trial – though Musk's lawyers noted the expiration date only holds if neither of them files a lawsuit.
"Twitter's bid for extreme expedition rests on the false premise that the Termination Date in the merger agreement is October 24, glossing over that this date is automatically stayed if either party files litigation. By filing its complaint, Plaintiff has rendered its supposed need for a September trial moot," Team Elon's response to the court [PDF] stated.
- Twitter sues Musk: He can't just 'change his mind, trash the company, walk away'
- Twitter claims Elon Musk bailed from sale with 'invalid and wrongful' reasons
- Elon Musk considering 'drastic action' as Twitter takeover in 'jeopardy'
- Musk can't tweet about Tesla without lawyer approval – and he's still fighting to end that
Musk's team accused Twitter of trying to hide its true number of bot accounts and attempting to force the deal through. The lawyers said Musk had repeatedly asked Twitter for more information to prove its claim that less than five per cent of all monetizable daily active users were fake, and the company allegedly hadn't cooperated.
"Twitter's sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad Defendants into closing," the legal eagles argued. Instead, Musk wants the trial to start in February 2023 so he has more time to investigate Twitter's claims.
Chancellor Kathaleen McCormick, the chief judge at Delaware's Court of Chancery, sided with Twitter. "The reality is that delay threatens irreparable harm to the sellers and Twitter," she said on Wednesday during a hearing held over Zoom, NPR reported. "The longer the delay, the greater the risk."
As such the case will go ahead in October. "We are pleased that the court agreed to expedite this trial," a Twitter spokesperson told The Register. ®