Twitter was successful in its bid for a fast-tracked trial Tuesday in a Delaware Court of Chancery fight to force Elon musk to close on his $44 billion agreement to acquire the social media behemoth, with a trial ordered to start as early as October of this year.
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After an hour-long video conference, Chancellor Kathaleen St. Jude McCormick rejected Musk’s call for a trial in February of 2023, and sided with Twitter’s bid to move forward with the proceedings this fall, although not as early as Twitter’s September request.
The Chancellor did find that there was room for flexibility in setting a trial schedule, however also stated “the reality is, delay threatens irreparable harm to the seller, Twitter.”
Musk proclaimed that he was terminating the deal on July 8, accusing Twitter of failing to disclose details on fake accounts on the social media platform, which impacts revenue. Twitter then sued on July 12 to force the deal to continue.
The two companies set October 24 as a “drop dead” closing date for the deal, with Twitter seeking a four-day trial starting Sept. 19 on its call for a “specific performance” order obliging Musk to pay up at $54.20 per share and take ownership of the company. Twitter argued a September trial would leave sufficient time for the Delaware Supreme Court to review Chancellor McCormick’s decision while maintaining the original deadline.
William Savitt, counsel to Twitter, told the Chancellor that the court has set similar expedited schedules for contract disputes far less extreme than the one now before the court.
“The overhang of the merger agreement has created substantial employee retention challenges for Twitter,” Savitt stated. “Musk’s relentless attacks on Twitter and the uncertainty he has created likewise create risk.”
Representation for Musk argued that he only terminated the deal after months of alleged “runaround,” “obfuscation” and delays in Twitter’s responses to questions about the true percentage of automated “bot” or spam accounts that do not actually generate revenues on Twitter’s platform.
“What you’re talking about is a company that has a massive amount of data that has to be analyzed, billions of actions on the platform have to be analyzed in order for us to get to the bottom of the real issue here,” Andrew J. Rossman said.
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Source: https://www.law360.com/articles/1511951/chancery-orders-october-trial-for-elon-musk-and-twitter
