Twitter won an early victory in its legal battle to force Elon Musk to complete his $44 billion (€43 billion) takeover of the company, after a judge sided with the social media company and set a timetable for a fast-track trial starting in October.
In her ruling, chancellor Kathaleen McCormick of the Delaware court of chancery warned the “cloud of uncertainty” hanging over Twitter’s business would become larger in the event of a long wait for a trial.
“The reality is that the delay threatens irreparable harm to the sellers,” Judge McCormick said, ordering a five-day trial and adding that the court had the ability to handle the expedited process.
During the hearing, Twitter’s lawyers accused the billionaire Tesla chief executive of “attempted sabotage” of the social media company and said a quick, four-day trial was needed to prevent further damage to its business. Lawyers for the social platform said uncertainty over the deal inflicts harm on Twitter “every hour of every day” and urged the judge to begin the trial in mid-September.
Although the trial will begin a little later and last a day longer than Twitter had asked, the judge’s ruling is far closer to the social media platform’s request than Mr Musk’s. His lawyers had argued it should not begin until 2023 and labelled Twitter’s proposed timetable “preposterous”.
On July 8th, Mr Musk announced he was backing out of the deal to buy Twitter for $54.20 a share, alleging the company had breached the merger agreement by not sharing sufficient information about fake accounts and misleading regulators over the matter.
Twitter is suing Mr Musk in a bid to force him to complete the acquisition, accusing him of repeatedly breaching the terms of the merger agreement and trying to back out because tech markets have dropped since the deal was first struck in April.
Bill Savitt of Wachtell, Lipton, Rosen & Katz, a lawyer for Twitter, said that the trial should be expedited to allow sufficient time for any ruling to be enforced before deal financing agreements with banks expire in April 2023.
Mr Musk’s team had suggested a trial start in February at the earliest. Representing Mr Musk, Andrew Rossman at Quinn Emanuel argued that the debate over Twitter’s fake accounts required lengthier investigation as “massive amount of data” and “billions of actions on their platform” would need to be analysed.
Analysts have speculated that Mr Musk may have buyer’s remorse given the rout in tech stocks since he agreed to buy the company in April for $54.20. Its share price now stands at $39.07. The two parties could potentially renegotiate a deal at a lower price or agree a settlement. — Copyright The Financial Times Limited 2022
