The magistrate of the Elon Musk-Twitter case has decided to delay the trial date and extends the deadline for both parties to reach an agreement before October 28. If not, they will have to settle their dispute in Delaware court, where business cases in the United States are concentrated and where the vast majority of case law is dictated.
The postponement of the meeting, scheduled for October 17, leads to the interpretation that complications are arising in the negotiations. For this reason, the judge grants a discount time for the lawyers to try to overcome their differences. The last Difficulties lie in Musk’s ability to raise funding: 13,000 million dollars of debt, conditioned to the closing of the operation. It seems that the billionaire is not convincing the creditors.
The negotiations had been taking place in recent days prior to the trial, which triggered the richest man in the world to retract and finally decide to keep his offer of $44 billion or $52.4 per share. The poor prospects for the success of the acquisition have led Twitter to register losses in the last three sessions.
However, the provision of the founder of Tesla to reach an agreement will be essential to avoid going to court. In this case, the judge in charge is Kathaleen McCormick and some experts consider that this does not favor Musk. The magistrate has a reputation for positioning himself with sellers and for advocating for deals to be completed. In 2021, he spoke out in favor of the DecoPac confectionery firm when the private equity Snow Phipps tried to back down on his acquisition, citing the problems that arose after the coronavirus.
Musk, with one foot in Delaware
It is no coincidence that the trial is being held in Delaware. “The Delaware court is unique and has a 220-year history of business and enterprise, which is why it has spawned much of modern jurisprudence of the United States,” says the state government on its website.
Delaware concentrates a great business activity thanks to the tax benefits it offers. More than a million companies have their headquarters there and 66% of them are part of the Fortune 500 list. Also, in 2021, more than 90% of IPO applications (public offerings for sale, IPOs) in the United States were registered in that court.
The total number of companies in the state is 1.8 million (beyond those that also have their headquarters there), according to government data. That implies that there are more businesses in Delaware than people, since the total population is around one million. The ratio is easy to calculate and there are about two companies per person.
If Elon Musk and Twitter do not reach an agreement before the new date established by the judge, the richest man in the world will have to resolve his case in that court, which carries a large burden of jurisprudence on his back. He has already started the countdown and there are barely three weeks left to approach positions (which includes closing the debt).
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Countdown for Elon Musk: the purchase of Twitter chokes and the most hardened court awaits him