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Twitter’s battle with Elon Musk over $44 billion deal heads to Oct. 17 trial
Global Banking & Finance Review®
Company
By Tom Hals
WILMINGTON, Del. (Reuters) -Twitter’s bid to hold Elon Musk to his $44 billion deal for the social media platform will head to a five-day trial beginning Oct. 17, and Musk must reveal by the end of Friday any legal claims he has against the company, a Delaware judge ruled.
Musk, the world’s richest person and chief executive of Tesla Inc, has until 5 p.m. EDT (2100 GMT) on Friday to file any counterclaims, according to the order signed late Thursday by Chancellor Kathleen McCormick of the Delaware Court of Chancery.
Musk’s lawyers have said he might file counterclaims – essentially his own lawsuit against Twitter – in which he could seek financial damages for the disputed deal.
The Tesla CEO and SpaceX chief said he was walking away from the deal on July 8, blaming Twitter Inc for breaching the merger agreement by misrepresenting the number of fake accounts on its platform.
Twitter sued days later, calling the fake account claims a distraction and saying Musk was bound by the merger contract to close the deal at $54.20 per share. The company’s shares were up 1.4% in morning trading on Friday at $41.45.
McCormick fast-tracked the case to trial last week, saying she wanted to limit the potential harm to Twitter caused by the uncertainty of the deal.
Twitter has blamed the court fight for slumping revenue and causing chaos within the company.
The two sides had basically agreed to an Oct. 17 trial, but were at odds over the limits of discovery, or access to internal documents and other evidence.
Musk accused Twitter this week of dragging its feet in response to his discovery requests, and Twitter accused him of seeking huge amounts of data that are irrelevant to the main issue in the case: whether Musk had violated the deal contract.
The chief judge in her order appeared to anticipate discovery disputes to come.
“This order does not resolve any specific discovery disputes, including the propriety of any requests for large data sets,” said McCormick.
Musk also faces a weeklong trial in Wilmington, Delaware, beginning Oct. 24. A Tesla shareholder is seeking to void as corporate waste and unjust enrichment the CEO’s record-breaking $56 billion pay package from the electric vehicle maker.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Chizu Nomiyama)
A merger agreement is a legal document that outlines the terms and conditions under which two companies agree to combine their operations into one entity.
Counterclaims are legal claims made by a defendant in response to a plaintiff's claim, essentially turning the tables and allowing the defendant to seek damages or relief.
Corporate governance refers to the systems, principles, and processes by which a company is directed and controlled, ensuring accountability and transparency.
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