Twitter won an early victory in its legal battle to force Elon Musk to complete its $44 billion takeover of the company after a judge sided with the social network and set a timetable for a fast track trial to begin in October.
In her ruling, Delaware Court of Chancery Chancellor Kathleen McCormick warned that the “cloud of uncertainty” looming over Twitter’s business would get bigger if the court waits for a long time.
“The reality is that the delay threatens sellers with irreparable damage,” McCormick said, setting a five-day trial and adding that the court has the ability to expedite the process.
During the hearing, lawyers for Twitter accused the billionaire Tesla chief executive of “attempting to sabotage” the social network and said a speedy four-day trial was needed to prevent further damage to its business.
Lawyers for the social platform said uncertainty over the deal is hurting Twitter “every hour of every day” and urged the judge to begin legal proceedings in mid-September.
Although the lawsuit will start a little later and last a day longer than Twitter requested, the judge’s decision is much closer to the social media platform’s request than Musk’s. His lawyers argued it shouldn’t start until 2023 and called Twitter’s proposed timeline “absurd.”
Following the decision, Twitter wrote, “We are delighted that the court has agreed to expedite this trial.” A spokesman for Musk’s legal team did not immediately respond to a request for comment.
On July 8, Musk announced that he was pulling out of a deal to buy Twitter at $54.20 a share, alleging that the company violated the merger agreement by failing to provide sufficient information about fake accounts and misleading regulators about the matter.
Twitter is suing Musk in an attempt to force him to complete the acquisition, accusing him of repeatedly violating the terms of the merger agreement and trying to pull it out because tech markets have plummeted since the deal was struck in April.
In the first lawsuit between a Silicon Valley company and the world’s richest man on Tuesday, a social media group claimed that Musk was hurting the business by pushing it online and disrupting work, such as refusing to give a green light to his employee. retention plans.
“This is an attempt at sabotage,” Bill Savitt of Wachtell, Lipton, Rosen & Katz, a Twitter lawyer, said during the hearing. “He is doing everything he can to bring Twitter down. He’s doing everything he can to endanger Twitter, he’s doing everything he can to get attention on Twitter, and he’s doing it to try and break the contract he promised to keep.”
Savitt also argued that the litigation should be expedited to allow enough time for any decision to be enforced before the deal financing agreements with banks expire in April 2023.
Musk’s team suggested that the trial run should begin no earlier than February. Representing Musk, Quinn Emanuel’s Andrew Rossman argued that the fake Twitter account debate needed a longer investigation, as “a huge amount of data” and “billions of activity on their platform” needed to be analyzed.
Rossman said Twitter didn’t say that Musk had violated the combined agreement until Musk began terminating the deal, adding, “You can’t put off going to court for help and then show up and expect an acceleration.”
He also accused Twitter of running Musk’s teams when they asked for more information about fake accounts, and said Musk had no incentive to hurt the company given that, as the second-largest shareholder, he has “much more influence.” economic rate” than Twitter’s own advice.
Analysts have speculated that Musk may feel buyer remorse over the tech stock debacle, as he agreed to buy the company for $54.20 in April. Its share price is now $39.07. Both parties could potentially renegotiate the deal at a lower price or negotiate a settlement.
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