Elon Musk-Twitter Trial Postponed as Deal Tries to Close
Elon Musk has been granted a stay in his pending trial against Twitter over his proposed acquisition of the social media company as the two sides continue talks to close the deal on its original terms — reports The Verge.
Musk originally offered to buy Twitter for a whopping $44 billion USD back in April. The celebrity billionaire later wanted out of the deal, citing a “material breach” of the agreement on Twitter’s part that had to do with the company’s alleged understatement of the number of bot accounts on its platform and withholding of related information.
Musk filed to terminate his bid in July, and Twitter sued him to go through with the deal in response. The two parties were scheduled to meet in court on October 17th, with Musk’s deposition slated for October 6-7.
“This action is stayed until 5 p.m. on October 28, 2022, to permit the parties to close on the transaction,” Judge Kathaleen McCormick of the Delaware Court of Chancery wrote in a ruling on Thursday evening.
“If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates.”
Musk’s side was granted the stay despite the protests of Twitter’s lawyers. The Twitter side urged Judge McCormick not to put stock in Musk’s words.
“Now, on the eve of trial, Defendants declare they intend to close after all. ‘Trust us,’ they say, ‘we mean it this time,’ and so they ask to be relieved from a reckoning on the merits,” Kevin Shannon, a lawyer for Twitter, wrote in a letter to the judge.
“Twitter will not take yes for an answer,” Musk’s legal representation argued in response. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests,” said Edward B. Micheletti.
Twitter’s lawyers also expressed concerns about financing for the deal. According to Twitter, Musk has not finalized plans for more than $12 billion in debt financing that he would need to close the deal at his original offer of $54.20 per share.
“Just this morning, a corporate representative for one of the lending banks testified that Mr. Musk has yet to send them a borrowing notice and has not otherwise communicated to them that he intends to close the transaction, let alone on any particular timeline,” wrote Shannon.
Musk said on Tuesday that buying Twitter is a stepping stone to creating “X” — an “everything app,” as he described it.