Tuesday Jul 19, 2022
Twitter’s lawsuit to hold Elon Musk to his $44 billion takeover will go to trial in October after a Delaware judge said on Tuesday the social media company deserved a quick resolution of the deal’s uncertainty.
The ruling is a blow to Musk who pushed for a trial in February which his lawyer told the court would allow for an extensive investigation into the true number of spam accounts on the platform. Twitter had requested a September trial.
Chancellor Kathaleen McCormick of the Court of Chancery in Delaware said the parties were capable of handling an expedited trial.
“The reality is delay threatens irreparable harm to the sellers,” she said, referring to Twitter.
She asked the parties to work out the schedule for the trial, which she set at five days.
The Twitter stock rose throughout Tuesday morning and was up 3.6% at $39.81 in the early afternoon.
Twitter wants McCormick to find Musk breached the merger agreement and to order him to complete the merger at the agreed price of $54.20 per share. It said it needed the earliest possible trial date in case Musk was ordered to close and additional litigation was then needed to address financing.
Twitter’s lawyer William Savitt argued during the hearing that the number of the bot and spam accounts on its service had no bearing on its deal with Musk. He said Musk seized on the issue because he was seeking to “conjure an exit ramp for a deal that doesn’t have one.”
Musk had argued an expedited trial would prevent the truth about spam from coming to light.
A lawyer for Musk at Tuesday’s hearing accused Twitter of dragging its feet in responding to Musk’s requests for information regarding the methods for calculating the number of spam accounts.
“When Mr Musk started asking questions, the answers he got were alarming,” said Andrew Rossman, Musk’s lawyer. He said it will take months to analyze massive amounts of data to resolve Musk’s questions about Twitter’s spam accounts.
Rossman also pushed back on the notion that Musk was trying to harm Twitter, pointing out the billionaire held a larger stake than the combined holdings of the directors of Twitter.