Photo: NY Times
Twitter has filed suit against Elon Musk to press him into buying Twitter for $44 billion – an agreement the business magnate said he was canceling last week.
The suit filed on Tuesday charges Musk with hypocrisy and bad faith in violating his deal with Twitter.
It says Musk utilized a series of pretexts to attempt suspension on the buyout following the market slump, making it look like he was diving into a bad deal.
However, he was under a legally binding contract.
“Musk wanted an escape. But the merger agreement left him little room,” said attorney William Savitt and other lawyers representing Twitter.
Twitter and Musk are now up for a costly, critical legal war in which the former reluctant seller will attempt to compel the hand of a currently disinclined buyer.
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“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the social media platform’s lawyers stated in the suit.
“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.”
On Twitter, Musk wrote: “Oh the irony lol,” briefly following the lawsuit’s filing.
Delaware law obliges the defendant to respond within 20 days after the complaint. However, Twitter has brought forward an expedited timetable, pointing out that any delay would harm the company.
Lawyers who have experience in the Delaware Court of Chancery say Musk’s victory will be a steep mountain to climb. According to experts, the case may depend on proving that Twitter was not advancing in the agreements.
“There is a body of case law in Delaware that says buyers’ remorse does not allow a buyer to back out of a deal,” stated a lawyer who has practiced in the court for 14 years named Daniel Griffith.
“This is a complicated case, but, at the end of the day, the legal analysis won’t be that sophisticated: It’s just whether there was what’s called a material adverse change or not,” he stated.
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