Twitter filed a lawsuit against Elon Musk on Tuesday to force him to complete the $ 44 billion takeover of the company. This sets up a long court battle over the future of social media services.
Musk agreed in April to buy Twitter, but last week he said he would withdraw from the contract. Twitter took Musk to court in Delaware to get him to abide by the deal to buy Twitter. The court will decide whether he still has to pay for the purchase or whether Twitter has broken its promise to give Musk the data he requested, which would allow him to get out of it.
In the lawsuit, the company said Musk refused to do what he agreed to do for Twitter and invest because the deal he made no longer served his own interests. “Musk seems to think that unlike anyone else covered by Delaware contract law, he has the right to change his mind, trash the company, disrupt its operations, destroy shareholder value and walk away.
The argument revolves around the question of who should know what. Musk ended the deal because Twitter did not want to tell him about spam programs, often called fake invoices, online. He always said he did not believe the company when it said that about 5% of its active users were robots. He said Twitter had deliberately lied to the public and prevented him from learning more about how it handled the data. Musk has also said that Twitter did not give enough notice before he got rid of two top executives.
Musk, on the other hand, signed a contract with Twitter that is legally binding. As part of the deal, Twitter added a special performance clause that gives it the right to go to court to enforce the sale as long as the billionaire still owes money.
In a letter sent by Musk’s lawyers on Sunday, Twitter’s lawyers said Musk’s decision to cancel the deal was “invalid and unfair” and that he “knowingly, intentionally, willingly and grossly violated” his contract to buy the company. The company has said that it is sure of the statistics of its spam accounts and that it uses spam experts to check the count and make sure it is correct.
Twitter said in its lawsuit that Musk, who also runs the car company Tesla, wanted to cancel the deal because changes in the stock market had damaged his wealth. (In recent months, Tesla’s stock prices have plummeted.) Twitter said the billionaire used his concerns about robots to break out of the deal.
According to the complaint, Musk broke a promise not to publicly criticize Twitter officials and “secretly gave up” on trying to get a loan to pay for the purchase. The social media company says that by doing so, he has broken his promise to use “reasonable best efforts” to close the agreement.
The company said: “Musk wanted to escape.” “But the merger agreement gave him little leeway to move.
Musk did not respond to a request for comment.
In an email to staff on Tuesday, Twitter’s chief lawyer, Sean Edgett, said the company had “submitted a request for expedited processing along with the complaint, requesting that the case be heard in September, as it is very important that this case be resolved. soon.”
Twitter CEO Parag Agrawal said: “We took this opportunity to tell our story and defend our company, our employees and our investors. He also said: “We want to take full responsibility for the buyer for meeting his contractual obligations. We will take our case to court and we will win. ”The New York Times bought both memos.
Twitter wants you to try it out for four days in September. The deadline for the contract is October 24. If the acquisition still requires government approval at the time, Musk and Twitter will have six more months to complete it.
Brian JM Quinn, a law professor at Boston College, says Twitter’s legal arguments are strong. He pointed out that Musk’s tweets were all over the place. For example, the billionaire sent a tweet before signing the contract which showed that he knew what Twitter spam was. Musk tweeted: “We will defeat the spam or die when they try.
“His tweet will make his lawyers very angry,” Quinn said of Musk. “They use every whistle against him that they can find.
However, Musk could threaten to bring Twitter back to the negotiating table and let the billionaire buy the company for less. Both parties could reach an agreement as Musk pays Twitter for their loss. Or he could pay a $ 1 billion commission to get out of the deal, which is only allowed in certain cases, such as if Musk’s funding doesn’t work out.
If Musk manages to get rid of Twitter, it could be bad for the company. Since its offering price of $ 54.20 per share, the stock has fallen by more than 35%. In recent months, Twitter’s business has also been bad. In a statement to employees in May, Agrawal said the company had not achieved its financial and business goals.
Now that Twitter has sued, Musk and his lawyers are likely to respond. It is unknown at this time what he will do after leaving the post. This is where two parties search for information that they consider important for the case.
The case could then go to trial, but it is likely that a judge involved in the case will reject Musk’s attempts to stay out of jail. If the case goes to court, the judge will decide whether the Twitter giveaways were not enough and severely damaged the contract. – The New York Times says so.
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