Elon Musk is filing his own countersuit against Twitter to get out of his $44 billion deal to buy the social media giant.
Musk’s legal team wants that Delaware The Court of Chancery is granting them additional time and an opportunity to put together a case regarding fake accounts and “bots” on Twitter, he said New York Post.
This comes after Twitter on Monday accused Musk of trying to “delay” the company’s lawsuit to keep him on hold on its acquisition and called for a court hearing in September to ensure the deal’s funding stayed in place, according to a court document.
“Millions of Twitter shares trade daily under a cloud of Musk-generated doubt,” the company wrote. ‘No public company of this size and scale has ever had to endure these uncertainties.’
It is believed that the longer this stays in court, the more it could hurt Twitter’s stock prices and the easier it would be for Musk to secure a kinder takeover price.
Elon Musk is set to back Twitter’s lawsuit against him with a counterclaim of his own to end his $44 billion deal with the social media giant
Parag Agrawal, CEO of Twitter, attends the annual Allen and Co. Sun Valley Media Conference in Sun Valley, Idaho
Delaware Court of Chancery Chancellor Kathaleen McCormick will hear both Twitter and Musk’s lawsuits
Twitter has sued Musk and asked a Delaware judge to order him to complete the merger at the agreed price of $54.20 per share.
The company said if Musk is asked to complete the deal, it could take months of additional litigation to complete the debt financing, which expires in April. Because of this, Twitter urged the judge to reject Musk’s proposal to hold the trial in February.
Musk, the world’s richest person and CEO of electric car maker Telsa Inc, accused San Francisco-based Twitter of rushing the process to cover up the truth about spam accounts and “persuaded” him to buy the company.
The first hearing in Twitter’s original lawsuit will be held Tuesday in Delaware Chancellor Kathaleen McCormick.
McCormick will likely rule on Twitter’s request for an expedited trial. According to the Post, Twitter’s attorneys want the trial to begin in September, while Musk’s team wants it to begin in February 2023 at the earliest.
Musk’s counterclaim will also be heard by Chancellor McCormick.
On July 8, Musk said he was canceling the deal because Twitter violated the agreement by not responding to requests for information about fake or spam accounts on the platform, which is vital to business performance.
The billionaire appeared to respond to the lawsuit in a tweet Tuesday night, writing, “Oh the irony lol.”
He appeared to be referring to the fact that he was initially aggressive in pursuing the deal because of skepticism from the Twitter executive, roles that have now reversed.
Twitter has sued Elon Musk for breaching his $44 billion agreement to buy the social media platform
Twitter filed the lawsuit (above) Tuesday in Chancery Court in Delaware
Musk appeared to respond to the lawsuit in a tweet Tuesday night
Twitter’s lawsuit states, “Having organized a public spectacle to bring Twitter into the game, and after proposing and then signing a seller-friendly merger deal, Musk appears to believe that he — unlike any other party involved subject to Delaware contract law – is free to change his contract Remember, destroy the company, disrupt its operations, destroy shareholder value and walk away.’
Sean Edgett, Twitter’s general counsel, informed employees of the lawsuit in a company-wide memo Tuesday afternoon.
“We have also filed an expedited trial request alongside the complaint and requested that the case be heard in September as it is vital that this matter is resolved quickly,” Edgett wrote in the memo, according to the New York Times .
“At this point, we anticipate that the next step in the process will be for the court to set a timeline for the case,” he added.
The lawsuit was a widely anticipated move after Musk last week announced his intention to exit the March 25 merger deal.
Those penalties included a $1 billion breakup fee, as well as an opportunity for the parties to enforce the contract in court, something Twitter officials had previously promised.
The lawsuit was a widely anticipated move after Musk announced his intention to pull out of the April 25 merger agreement (file photo).
Musk argues that Twitter breached its contractual obligations by not disclosing key information about fake accounts on the platform.
However, it is unclear whether the courts will follow his reasoning. In the past, Delaware courts have compelled prospective buyers to honor signed merger agreements, although the facts in each case vary.
In 2020, for example, Tiffany & Co sued Louis Vuitton maker LVHM when the luxury retailer tried to pull out of a deal to acquire the jewelry maker.
The dispute was settled out of court when LVHM agreed to complete the acquisition of Tiffany at a slightly reduced price.
Twitter’s lawsuit will be heard in the Delaware Chambers of Commerce because both Twitter and the company with which Musk is merging are officially incorporated in Delaware.
Musk, chief executive officer of electric vehicle maker Tesla, did not immediately respond to a request for comment.
The lawsuit accused Musk of “a long list” of violations of the merger agreement that “cast a shadow over Twitter and its business.”