Twitter has requested a Delaware court docket to pressure Elon Musk to honour his $44bn settlement to purchase the corporate, setting the stage for a high-stakes authorized battle between the billionaire entrepreneur and the social media platform.
The Silicon Valley firm filed the lawsuit in Delaware chancery court docket on Tuesday, simply days after Musk final week introduced that he deliberate to terminate the deal, alleging Twitter had breached the merger settlement by not sharing ample info on faux accounts.
In the strongly-worded criticism, Twitter’s legal professionals mentioned that Musk’s claims have been “pretexts and lack any merit”. They argued the Tesla chief govt was attempting to again out of the deal fairly than “bear the cost” of the downturn in tech shares.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” the criticism mentioned.
The criticism additionally accused Musk of “a long list of material contractual breaches . . . that have cast a pall over Twitter and its business”, together with placing the deal on maintain “pending satisfaction of imaginary conditions”, breaching financing obligations and misusing confidential info.
The lawsuit contained photos of quite a few tweets wherein Musk appeared to goad Twitter and its management, which its legal professionals alleged violated an obligation within the settlement to not disparage the corporate.
The transfer units the stage for a messy authorized struggle between Twitter and one in every of its most prolific and highly effective customers. The firm’s legal professionals have requested the court docket to fast-track a trial for September.
The lawsuit reveals how the deal between Twitter and Musk unfolded, beginning with the 9.1 per cent stake he “secretly” in-built March.
It mentioned that Musk informed Parag Agrawal, Twitter’s chief govt, and board chair Bret Taylor that he had three choices in thoughts: be part of the corporate’s board, take over the enterprise or begin a competitor.
Musk was supplied, and accepted, a board seat however days later modified his thoughts and made an unsolicited bid for Twitter, saying he must “reconsider my position as a shareholder” if his supply was not accepted.
In saying his plans for Twitter, Musk promised to spice up its flailing enterprise, take away faux accounts from the platform and introduce a “free speech” ethos.
But on Friday, Musk introduced his intention to stroll away from the deal.
His staff has disputed Twitter’s estimate for the variety of faux accounts, which stands at 5 per cent of customers, and accused it of constructing “materially misleading representations” in its public disclosures.
In its lawsuit, Twitter dismissed the faux accounts declare and known as Musk’s cause for reneging on the deal “a model of hypocrisy”. Musk additionally texted Taylor in April to say that “purging fake users” may solely be accomplished if Twitter was a non-public firm as a result of “it would make the numbers look terrible”, based on the criticism.
Some analysts have steered Musk is perhaps making an attempt to barter the deal at a lower cost, given the rout in tech shares, and that the events may attain a settlement to keep away from pricey and protracted litigation. Musk didn’t instantly return a request for remark.
Twitter’s lawsuit additionally alluded to hypothesis that Musk’s supply to purchase the corporate could have been a joke gone too far: “For Musk, it would seem, Twitter, the interests of its stockholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke.”