Twitter is going after Elon Musk with a lawsuit to force him into buying their company for $44 billion – an agreement the business magnate said he was canceling last week.
The lawsuit filed on Tuesday accuses Musk of hypocrisy and bad faith in violating his deal with Twitter.
It states that Musk utilized pretexts, such as an inquiry about the number of fake and spam accounts on the platform, to attempt a suspension following the market’s slump, making it look like he was diving into a bad deal.
But the suit indicates he was under a legally binding contract.
“Musk wanted an escape. But the merger agreement left him little room,” said attorney William Savitt and other lawyers representing Twitter.
Twitter and Musk are set for a costly legal battle in which the former reluctant seller will attempt to compel the now disinclined buyer.
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“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the social media platform’s lawyers stated in the suit.
“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.”
On Twitter, Musk wrote: “Oh the irony lol,” briefly following the lawsuit’s filing.
Delaware law obliges the defendant to respond within 20 days after the complaint. However, Twitter has brought forward an expedited timetable, pointing out that any delay would harm the company.
Lawyers who have experience in the Delaware Court of Chancery say Musk’s victory will be a steep mountain to climb. According to experts, the case may depend on proving that Twitter was not advancing in the agreements.
“There is a body of case law in Delaware that says buyers’ remorse does not allow a buyer to back out of a deal,” stated a lawyer who has practiced in the court for 14 years named Daniel Griffith.
“This is a complicated case, but, at the end of the day, the legal analysis won’t be that sophisticated: It’s just whether there was what’s called a material adverse change or not,” he stated.
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