A judge on Tuesday granted Twitter’s request for an expedited trial in its legal fight against Tesla CEO Elon Musk over his attempt to pull out of a $44 billion deal to buy the company.
While Twitter had asked the Delaware Court of Chancery for a late September trial, Chancellor Kathaleen St. Judge McCormick ordered a five-day trial in October. She explained that her decision was influenced by the “cloud of uncertainty” that hangs over Twitter after Musk, the world’s richest man, backed out of a deal to buy the company earlier this month.
Musk had requested the trial be delayed to February 2023 because of the complex nature of the situation.
McCormick said he and his attorneys underestimated the court’s ability to “quickly process complex litigation.”
“Delay threatens irreparable harm,” the judge said. “The longer the delay, the greater the risk.”
Twitter filed a lawsuit against Musk last week after he sent a letter to the platform’s board expressing his intent to terminate his bid to purchase the company for $44 billion.
The company argues Musk is refusing to “honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” according to the complaint.
“Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” the complaint added.
The lawsuit accuses Musk of having “repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price” since signing the 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,” it adds.
A regulatory filing from attorney Mike Ringler on behalf of Musk argued that Twitter is “in material breach of multiple provisions” of their April 25 merger agreement, and “appears to have made false and misleading representations upon which Mr. Musk relied when” agreeing to purchase the company.
Musk has claimed Twitter is undercounting fake “bot” accounts, which he says is information that is “fundamental to Twitter’s business and financial performance.”
The letter claims that Twitter must provide all the data that he requests “for any reasonable business purpose related to the consummation of the transaction” and accuses the company of failing to comply with its contractual obligations.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” the letter reads. “Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”