Musk seeks yet another excuse to get out of Twitter buyout: This time it's Mudge's severance check
If at first you don't succeed...
Elon Musk has come up with a new reason to get out of his acquisition of Twitter - a severance payment.
In the latest attempt, Musk's lawyers said the merger agreement stated Twitter would not "grant or provide any severance or termination payments or benefits to any Company Service Provider other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice."
The world's richest man is disturbed that the $7.75 million severance package paid to former CSO Peiter "Mudge" Zatko on 28 June was in breach of the contract, they claimed in a letter to the Securities Exchange Commission. Mudge claims Twitter ignored glaring security flaws in its basic platform.
Musk should, therefore, be allowed to walk away from the deal, his lawyers argued. But Twitter's legal team hit back, and claimed Musk's letter is "invalid and wrongful".
- Judge tells Elon Musk he can't stall Twitter trial
- Musk tries to stall Twitter takeover trial following whistleblower claims
- Twitter whistleblower summoned to Senate Judiciary Committee
- Twitter savaged by former security boss Mudge in whistleblower complaint
"Twitter has breached none of its representations or obligations under the Agreement," lawyers wrote in a letter on Monday. They stuck to their argument accusing Musk of breaking the terms and conditions of the merger agreement by suddenly trying to wriggle out of having to pay $44 billion scot-free.
"As was the case with each of your prior purported terminations, the Musk Parties third purported termination is invalid for the independent reason that Mr Musk and the other Musk Parties continue to knowingly, intentionally, willfully, and materially breach the Agreement."
The Tesla and SpaceX founder is being sued by Twitter for walking back on his promise to buy the social media company for $44 billion in cash. Musk claimed he had halted efforts to buy Twitter after officials refused to disclose the real number of fake accounts on its platform. Twitter, however, is trying to force the billionaire to complete the deal or pay around $1 billion in penalties for wasting everyone's time.
The trial is scheduled for 17 October. Meanwhile, Musk has attempted to delay it multiple times and has tried to cancel the acquisition contract by accusing Twitter of breaching the rules on three separate occasions.
The company's shareholders are meeting on Tuesday to vote on whether to approve the takeover deal. "The Agreement is not terminated, the Bank Debt Commitment Letter and the Equity Commitment Letter remain in effect, and Twitter again demands that Mr.Musk and the other Musk Parties comply with their obligations under the Agreement, including their obligations to use their respective reasonable best efforts to consummate and make effective the transactions contemplated by the Agreement," the letter added.
"Twitter intends to enforce the Agreement and close the transaction on the price and terms agreed upon with the Musk Parties." ®