Elon Musk was sued by Twitter on Tuesday in order to complete the acquisition of the company which has a capital value of $44 billion, by setting the place for an extended legal battle over the destiny of the social media platform. Mr. Musk declared last week that he intended to walk away from the deal of buying Twitter that he agreed to in April, due to which, Twitter sued him in the Chancery Court in Delaware to push him to abide by the agreement of acquisition. The decision of whether Elon Musk will have to complete the acquisition or whether Twitter infracted its commitment to provide Musk with the data he appealed will now be made by the court.
Twitter said in the suit that since the deal no longer serves his personal interests, he refused to respect his commitments to Twitter and its shareholders. According to the company, unlike any other party subject to Delaware contract law, Musk believes that is free to make changes regarding the contract, disrupt the operations of the company, destroy the stakeholder value and get away with it.
Twitter said in the suit since the deal no longer serves his personal interests Musk refused to respect his commitments to Twitter.
The major concern of the case is the issue of disclosure that has not been given by Musk. Mr. Musk has claimed that the reason for terminating the deal was the resistance of the company to handing over the information about the fake accounts on the platform which are also known as spam bots. He had repeatedly mentioned that the public statement given by the company about only 5 percent of bot users is unbelievable. He also mentioned that Twitter has misled the public and blocked his efforts to dig ways of how the company accounts for the given numbers. Musk has also aimed at how the company fired two major executives without a warning.
To this, the company has said that Mr. Musk has signed a legal agreement according to which the company can sue him to force the deal so long as the billionaire’s debt that he secured for the purchase is still in place. Twitter’s lawyers had sent a letter to Mr. Musk’s lawyers saying that his move to cancel the deal was ‘wrongful and invalid’ and that he ‘intentionally, knowingly and wilfully breached’ his agreement to buy the company. Twitter however has shown confidence in its figures about the bots as it uses experts to ensure accuracy.
In the lawsuit, Twitter argued that since Mr. Musk also leads Tesla, wanted to terminate the deal due to the effects on his wealth after the shares of the automaking company have fallen in recent months. Additionally, Mr. Musk violated a commitment not to insult Twitter officials in public and “secretly discontinued” his efforts to acquire loan financing for the transaction. Musk also broke an agreement according to the lawsuit not to insult Twitter officials publicly and he ‘secretly discontinued’ efforts to acquire loan financing for the deal.
Twitter’s lawyers had sent a letter to Mr. Musk’s lawyers saying that his move to cancel the deal was ‘wrongful and invalid’.
A four-day trial is expected by Twitter to take place in September. According to some of the officials, the threat by Mr. Musk of walking away from the deal could be helpful to Twitter in negotiating at the table. Else, things can also be settled by Musk paying the damages to the company.
Twitter and Mr. Musk, both have come together along with their legal teams to settle the matter. Willian Savitt will be leading the way for Twitter. He is a lawyer at Wachtell Lipton, Rosen & Kats. Lipton is famous for his developing legal tactics, in order to protect the companies from their hostile buyers, like the so-called pill of poison that was put by Twitter against Mr. Musk to protect itself. The lawyer also has an experience before Delaware’s Chancery Court and in the past, has saved companies but Mr. Musk is making him an opponent.