Twitter sues Elon Musk, setting stage for epic legal battle

[BumRushDaShow]

Source: Washington Post

Twitter filed suit Tuesday against Elon Musk to force the billionaire to make good on his promise to purchase the company, issuing the first legal volley in what is expected to be one of most high-profile business trials in recent history.

For months Musk has publicly threatened to walk away from the sale of the influential social network, efforts that culminated last week in a Securities and Exchange Commission filing claiming he was “terminating” the agreement because Twitter hadn’t given him enough information about spam and bots on its service. Now a judge in a specialized business court in Delaware must determine whether the world’s richest man can exit the $44 billion deal, despite a contract binding him to complete the acquisition barring a major change to the company’s business.

Experts said they anticipated months of agonizing legal drama to play out in the Delaware Court of Chancery, a tiny, clubby court that has decided the outcomes of some of the biggest business squabbles in the U.S. The court has just seven judges — one chancellor and six vice chancellors — who have enormous discretion to force companies to take specific actions.

The process will likely submit Twitter to a grueling level of public scrutiny, forcing the platform to open up its books and expose internal deliberations in ways that might further damage its stock price and reputation, already-battered from the market downturn and months of sparring with Musk.

Read more: https://www.washingtonpost.com/technology/2022/07/12/twitter-elon-musk-lawsuit/

[Dopers_Greed]

1. Fascist vs. Fascist

You love to see it

[bucolic_frolic]

2. I had such a nice short in TWTR going on when Fusk announced his 9.6% stake

Big players are not supposed to disrupt markets like that!

[yaesu]

3. I just read a twitter post defending musk just for a laugh & found out it was an AD. Musk

is buying ads on twitter to defend himself over screwing twitter lol. By the way, the post wasn't marked as an ad but clicked it to find it was.

[LetMyPeopleVote]

4. Here is a link to the lawsuit

Link to tweet

[PoliticAverse]

5. It would be more epic if the legal arguments had to be made via tweets. n/t

[GB_RN]

6. I See A Negotiated Settlement Coming...

Twitter probably doesn’t want the discovery to go through on its bot account numbers and Musk doesn’t want to pay the $1bln bailout called for in the original agreement much less pay to buy Twitter now (if he ever really did). So, there will probably be something negotiated where Twitter gets some cash and he walks away…and the shareholders and/or employees take a bath one way or the other.

[NullTuples]

7. The board's first responsibility is to maximize shareholder returns.

Ironically, that includes Elon Musk given that he already owns 9.1%.

Which reminds me - did he ever get in any trouble for buying half that stock without notifying the FTC that he owned more than 5% so he wouldn't have to pay more for the second half?

[GB_RN]

8. Nope...

A settlement would stabilize the price, but not bring it back to where it was. Discovery in a suit might show bot levels higher than they claim which would not only tank the stock price but kill ad revenue...and that really would clobber shareholder value.

[manicdem]

9. Musk won't settle

He's worth $240billion. I'm sure he'd gladly pay a billion for discovery into twitters inner workings.

Probably had it all planned from the start.

[moonshinegnomie]

11. It's not a billion

He’s being sued for specific performance. If he loses he can be forced to complete the 44 billion dollar merger.

[dalton99a]

10. FWIW The Delaware Court of Chancery:

https://courts.delaware.gov/chancery/judges.aspx

[LetMyPeopleVote]

12. Four cases lawyers for Twitter and Elon Musk will be examining as they head to court

This lawsuit will be fun to watch on the specific performance issue

Link to tweet

https://www.cnbc.com/2022/07/12/here-are-four-past-cases-twitter-and-elon-musks-lawyers-will-be-examining-as-they-head-to-court.html?utm_source=dlvr.it&utm_medium=twitter

The clause, known as specific performance, is often used in real estate cases to prevent buyers and sellers from calling off deals without good reason. But it’s also included in corporate merger agreements as a way to force a buyer or seller to close on a deal, barring material breaches such as fraud.

In its lawsuit filed with the Delaware Court of Chancery Tuesday, Twitter said Musk’s reasons for wanting to end the deal are “pretexts” and accused him of acting against the deal since “the market started turning.” The company asked the court for a trial in September.

The Delaware Court of Chancery, a non-jury court that primarily hears corporate cases based on shareholder lawsuits and other internal affairs, has ruled on a number of cases where a company cited the specific performance clause to force a sale. None were nearly as large as Musk’s Twitter deal — $44 billion — and the details underpinning them differ as well.

Still, past cases can provide context for how the Musk-Twitter dispute might end.

[robodruid1]

13. Billable hours.

Only the lawyers are going to win this one.

[Aussie105]

14. There's only a few things I question.

Is Twitter actually worth anything?

Is Musk actually that rich?

And why do Musk's rockets keep blowing up?

Oh, and a Tesla . . . send me one, free, please Elon! I will say nice things about you, honest!