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Twitter sues Elon Musk for pulling out of deal: NPR

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The Twitter lawsuit is setting the social network and the world’s richest man in a long, costly, high-stakes battle.

Sumyabrata Roy/NurPhoto via Getty Images; The Patrick Pleula Alliance/images via Getty Images


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Sumyabrata Roy/NurPhoto via Getty Images; The Patrick Pleula Alliance/images via Getty Images


The Twitter lawsuit is setting the social network and the world’s richest man in a long, costly, high-stakes battle.

Sumyabrata Roy/NurPhoto via Getty Images; The Patrick Pleula Alliance/images via Getty Images

Twitter is suing Elon Musk to force him to buy the social media company for $44 billion, a deal the world’s richest man said last week he called off.

The lawsuit, filed on Tuesday with the Delaware Chancery, accuses Musk of hypocrisy and bad faith in breach of contract with Twitter.

It alleges that Musk used pretexts, including asking how many fake and spam accounts the platform has, to try to kill the acquisition after a market downturn made it look like he was getting a bad deal. However, as stated in the lawsuit, it was entered into under a legally binding contract.

“Musk wanted to escape. But the merger agreement left him no room,” wrote lawyer William Savitt and other lawyers representing the social media company.

The lawsuit sets Twitter and Musk up for a costly, high-stakes battle in which a once-reluctant seller tries to impose a hand on a now unwilling buyer.

“Musk refuses to fulfill his obligations to Twitter and its shareholders because the deal he signed no longer serves his personal interests,” Twitter lawyers say in the lawsuit. “Musk appears to believe that he—unlike any other party subject to Delaware contract law—is free to change his mind, crash the company, disrupt its operations, destroy shareholder value, and leave.”

Musk tweeted, “Oh irony lol,” shortly after the lawsuit was filed. Neither he nor his representatives responded to NPR’s request for comment.

Under Delaware law, Musk’s legal team has 20 days to respond to a complaint. However, Twitter offered an accelerated schedule, arguing that any delay would hurt the company.

Twitter: Musk sparked buyers’ remorse after tech stocks plunge

The CEO of Tesla and SpaceX entered into an agreement to buy Twitter for $54.20 a share in late April after he became its largest shareholder. He promised to make the platform a stronghold of unrestricted free speech and solve the longstanding problem of spam and automated bots.

But since then, the fickle billionaire has changed. He started a fight with the company because of the prevalence of fake accounts, which, he claims, without providing evidence, are more than Twitter allows. He also directed a near-constant stream of criticism at the company, including using his Twitter feed to attack executives and complaining about its decisions and content moderation functions.

The agreement provides for a commission of $1 billion if one of the parties backs out of the deal under certain circumstances. Musk could try to accuse Twitter of misrepresenting the number of bots on the platform to avoid the fee, but legal experts say that argument is unlikely to prevail in court. In other merger disputes that went to Delaware court, the parties settled their differences by renegotiating at a lower sale price.

Twitter brushed aside Musk’s arguments in its complaint.

Once stock market conditions made the offer less attractive and shares of Tesla, Musk’s main source of wealth, declined, according to the lawsuit, the billionaire fired Twitter executives, denounced the company, and made public requests aimed at making the company look like it was being negligent. .

Twitter officials suspected that Musk was trying to evade the agreement.

“From the very beginning, the information requests of the defendants were aimed at trying to derail the deal. Musk’s increasingly outlandish requests reflect not a genuine study of Twitter’s processes, but a lawsuit-based campaign to try and create an uncooperative record from Twitter. the company’s lawsuit says.

Then there was a sudden departure.

On June 23, according to the lawsuit, Musk told Twitter executives that he was parting ways with one of his key people in the deal, former Intel CEO Bob Swan. “We are not on the same wavelength,” Musk allegedly wrote to Twitter executives.

After that, Twitter tried to contact the Musk team. According to the lawsuit, representatives from two banks advising the company, Goldman Sachs and JP Morgan, also tried unsuccessfully to talk to Swan’s successor.

The Twitter team used the terms of the merger agreement to get an update on Musk’s funding status. A day later, according to the lawsuit, Musk wrote a message to Twitter CEO Parag Agrawal and CFO Ned Segal.

“Your lawyers are using these conversations to create problems,” Musk allegedly wrote. “This needs to stop.”

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