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Twitter Sues Elon Musk After He Pulled Out of $44 Billion Deal

Twitter Sues Elon Musk After He Pulled Out of $44 Billion Deal

Musk will likely countersue.

Twitter has sued Elon Musk after he pulled out of the $44 billion deal to buy the social media platform.

The case will be heard in the Delaware Court of Chancery, which “specializes in corporate disputes and which previously has heard cases in which acquirers seek to renege on signed agreements.”

Twitter unleashes anger on Musk’s antics over the past three months:

Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests. Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away. This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business. Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfill his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions.

The social media platform claims Musk’s reasons to terminate the agreement “lack any merit.” Musk accused Twitter of the following: “(i) purported breach of information-sharing and cooperation covenants; (ii) supposed ‘materially inaccurate representations’ in the merger agreement that allegedly are ‘reasonably likely to result in’ a Company Material Adverse Effect; and (iii) purported failure to comply with the ordinary course covenant by terminating certain employees, slowing hiring, and failing to retain key personnel.”

The lawsuit says:

Twitter has abided by its covenants, and no Company Material Adverse Effect has occurred or is reasonably likely to occur. Musk, by contrast, has been acting against this deal since the market started turning, and has breached the merger agreement repeatedly in the process. He has purported to put the deal on “hold” pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition.

Twitter is entitled to specific performance of defendants’ obligations under the merger agreement and to secure for Twitter stockholders the benefit of Musk’s bargain. Musk and his entities should be enjoined from further breaches, ordered to comply with their obligations to work toward satisfying the few closing conditions, and ordered to close upon satisfaction of those conditions.

Twitter vs. Elon Musk by Mary Elizabeth on Scribd

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Comments

When Twitter sues Elon Musk, who wins?

The lawyers.

    Peabody in reply to Olinser. | July 12, 2022 at 7:59 pm

    Musk has 22,982,000 lawyers on his payroll. Some of them are sitting around not doing anything and Musk wants to give them some work to keep them busy.

First he bought a huge stake in the company, but they didn’t want him on the board.

Then he offered to he offered to buy the company, but they didn’t want to sell it.

After he found out it’s a shitty company he no longer wants it, but now they want to force him to buy it.

    I don’t think so. Musk is having a blast with this on Twitter.

    He wants to know how many bots there are as a condition of the deal, Twitter refused to share that information, Musk pulls out of the deal, Twitter has to show how many bots there are. In court. As Musk tweeted, Chuckmate. https://twitter.com/elonmusk/status/1546361634347749376

      I should have included the tweet that directly preceded the Chuckmate tweet: https://twitter.com/elonmusk/status/1546344529460174849

      Peabody in reply to Fuzzy Slippers. | July 12, 2022 at 7:52 pm

      “Musk is having a blast with this on Twitter.”

      He sure is. He’s my new hero.

      “Chuckmate!” Bwahaaa! Gotta love it.

      Exactly.

      “Violated his non-disparagement obligation . . .” that’s like being sued for saying cesspools don’t smell. What Musk did is threaten to expose the number of bots in the Twitter-verse. They don’t know how many there are, only that there are a great many, and that they don’t want the real number known. The mere thought of Musk obtaining the real numbers, disclosing the information, cleaning it up – terminating them – and repricing the deal is what this is all about.

      The mere possibility of being exposed publicly and turned into an honest operation, or just shut down, is the greatest threat to any Leftist operation or organization. This applies to everything from operations of the House Jan 6 Investigation committee and DoJ to the Walt Disney Company’s board, Black Lives Matter, the WaPo’ and NYT editorial rooms, and the contents of Hunter Biden’s laptop. Like cesspools, they all have stink on them.

      That’s why I am surprised Twitter went ahead with the lawsuit. I thought they were bluffing. I suspect they will argue that they already gave that information to Musk in that data dump. They may still be bluffing.

        Ironclaw in reply to Pasadena Phil. | July 13, 2022 at 8:32 am

        Even more interesting since it will most likely contradict their SEC filings, and those are filed under penalty of perjury.

        taurus the judge in reply to Pasadena Phil. | July 13, 2022 at 8:35 am

        They are bluffing and based on his reactions it seems Musk knows they are.

        At the end of the day, Musk cannot be “forced” to purchase it ( for any price) but he obviously wants to.

        Musk knows this is inflated value ( and I’m sure he has knowledge of other things well beyond the scope of this post) and there is a lot of money, liability and criminal activity going on.

        Twitter “has” to sue otherwise its almost an admission of guilt (they also know Musk manipulated them into taking that action too)- this puts Musk in the discovery seat and accusing Twitter of material breach and falsely inflating the company.

        Twitter has the losing hand and everybody knows it

        MajorWood in reply to Pasadena Phil. | July 15, 2022 at 1:04 am

        Maybe a bunch of their board members went to Oberlin?

rabid wombat | July 12, 2022 at 7:25 pm

Discovery should be ‘lit’…..

Twitter was supposed to operate as business as normal during this period. Instead they put in a hiring freeze and fired about a third of the directors, including the heads of a advertising and marketing. On this gtound alone Musk can walk out from the deal.

healthguyfsu | July 12, 2022 at 8:41 pm

To those who said you can’t read twitter without having an account you are wrong.

They try to make you think that is the case but there is a workaround.

When the screen comes up that has the log in sign up buttons. Click the log in button. On the next screen, an x pops up (usually in the top left corner). Click that x and you are back to reading without changing a thing!

That door swings both ways. Twitter needs to feel some pain for their indiscriminate malice.

Posturing for optics after they obfuscated their internals and data required in the deal. Good luck with the suit Twitter losers.

When advertisers learn how they have been cheated for years, Twitter will die under an avalanche of lawsuits. Then there will be lawsuits against the directors who failed to honor their fiduciary duty to shareholders.

Twitter is an important Deep State asset so I expect it will survive somehow. Someone will probably pick it up when the shares sink to $5.

    taurus the judge in reply to Pasadena Phil. | July 13, 2022 at 8:36 am

    This is my belief as well.

    Probably not “die” ( as in defunct) but severe financial loss and reorganization.

The Twitter Buyout is now the Twitter Bailout.
Stocks are swinging incoherently as speculators bet each ripple of each wave at present.
These are not investors, they are gamblers.
I believe the smart money is staying out of the fray.
Twitter is snookered.
If the Musk deal fails, Twitter is on the ropes.
And even if they manage to get that billion out of Elon..
Their losses will be far in excess of that.

Twitter is not US Robotics, they cannot hide their diverse automatons in dark warehouses. Elon Musk is not 3Com, he will not indulge submission of misinformation and disinformation. The Twitterverse is expanding to a singularity.