The platform has asked a specialized business law court to force the billionaire to honor his promise to buy Twitter for $44 billion.
The court battle between Twitter and Elon Musk opened this Tuesday, a week after the social network will initiate a lawsuit against the founder of Tesla and SpaceX to try to force him to buy it.
Thus, the platform has asked a court specialized in Business Law in the State of Delawarewhich forces the billionaire to honor his promise to buy Twitter for $44 billionafter Musk will leave the dealwhich included a termination clause.
Tuesday’s hearing is about a preliminary in an unprecedented legal battle between the richest man in the world and the popular social network, determined that the tycoon buy it.
A week ago the platform filed a lawsuit against Muskowner of the automaker Tesla and the aerospace company SpaceX, to force him to fulfill his acquisition commitment.
Despite is going through a reputational crisis due to Musk’s barrage of attacks and criticism“Twitter stock has been in good shape” since filing the lawsuitsaid Wedbush Securities analyst Dan Ives.
“It gives the impression that many investors who read the lawsuit concluded that this Game of Thrones-type showdown in court will end with a twitter victory“, held.
By saying “victory“, Ives refers to the judge deciding to force Musk to buy the Californian company at the price that was agreed at the end of April ($54.20 per share) or pay a hefty indemnity. And currently Twitter is listed below $40 per share.
the tycoon unilaterally undid the agreement on July 8after claiming that Twitter’s board of directors had not provided reliable information on the number of false accounts active on the network.
Specialized in these cases
The dispute is in the hands of the Court of Chancery, in the small state of Delaware, United States, specializing in business law. Its president Kathaleen McCormick has taken up the case. “She is a very serious judge, will not be intimidated by any of the parties. (…) In the past, it has not been soft with those who show bad faithsaid Adam Badawi, a law professor at UC Berkeley.
In your request, Twitter precisely accuses Musk of “hypocrisy”” and “bad faith.”After putting together a great show to go on Twitterand to propose and then sign a merger agreement, Musk thinks he’s free (…) to change their minds, defame the company, disrupt their business, destroy the value of their shares and wash their hands,” the company’s lawyers explained.
Thus, Kathaleen McCormick is known for having forced Kohlberga company that also tried to get out of a commitment, to buy the DecoPac company.
The social network used around the world by politicians, celebrities, activists and influencers seems to have little to do with smaller companies.
However, “it is not different enough for Delaware to risk its reputation and decide not to implement the terms of the agreement,” Badawi believes.
Tuesday’s hearing seeks to define the date of a possible trial. Likewise, Twitter has called for an expedited processstarting in September so that the period of uncertainty is not prolonged which, in part, has paralyzed the company.
Musk’s lawyers have filed an appeal this Friday to postpone the process until next year. Also, the experts anticipate that it will be necessary to analyze “mountains of data“to show, as Musk claims, that the platform has far more spammy and automated accounts than the official 5% it has put forward.
On the other hand, the judge you should also consider the terms of the financial package which was negotiated with banks and investors, so as not to risk the possibility of a buyback.
The Twitter mogul and board of directors may still choose to close the deal at a slightly lower price to avoid further litigation. “But that would be a rational thought“, warns Badawi, referring to the unpredictable character of Elon Musk, who according to the expert acts as a “free electron”.
In another case that was also tried in DelawareMusk “showed his will to go all the way,” recalls the professor. “And he won. I don’t think his instinct is necessarily to compromise.”
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Twitter and Elon Musk come to their first face-to-face in court