Twitter suit against Musk set for trial in October
New York, Jul 19 (EFE).- The Delaware court where Twitter filed suit against Elon Musk after the world’s second richest person called off his purchase of the online platform for $44 billion said Tuesday that it will hear the case in October, rejecting the SpaceX and Tesla CEO’s request for a trial date early next year.
In a Zoom hearing before Delaware’s Court of Chancery, attorneys for the billionaire sought a 10-day trial next February, saying that they needed “complex, technical discovery” to determine whether Twitter falsified user data in filings with the United States Securities and Exchange Commission (SEC).
Twitter’s lawyers, insisting that any delay would only increase the harm to their client, asked for a four-day trial in the “second half of September.”
The presiding judge, Kathaleen St. Jude McCormick, found Twitter’s argument more persuasive.
Musk formally withdrew from the merger agreement on July 8, claiming that Twitter was in “material breach of multiple provisions” of the accord, giving him the right to walk away without having to pay the $1 billion cancelation fee mandated in the contract.
He accused the company of having failed to supply him with the information necessary to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.”
The mogul has repeatedly raised that issue since signing the merger agreement in April, but Twitter has stuck to its contention that bogus accounts, commonly referred to as “bots,” represent no more than 5 percent of the total on the platform.
Four days after Musk abandoned the deal, Twitter filed suit, asking the Delaware court to compel the South African-born billionaire to go through with the transaction.
The Court of Chancery adjudicates many business disputes because Delaware is the legal domicile of more than 1.8 million firms, including more than two-thirds of Fortune 500 companies.
Many analysts suggest that Musk is using the dispute over bots as a pretext to walk away from an acquisition that has become vastly more expensive.
The offer Twitter accepted in April, $54.20 per share, represented a significant premium over Twitter’s share price of $39.31 prior to Musk’s acquisition of 9 percent of the company.
Since then, Twitter’s market capitalization has dropped by 25 percent, while Tesla shares – constituting the bulk of Musk’s wealth – have likewise fallen amid a broad decline in tech stocks.